Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing of a Proposed Rule Change To Amend the Short Term Option Series Program Related to Qualifying Securities

SECURITIES AND EXCHANGE COMMISSION [Release No. 34-105801; File No. SR-ISE-2026-34] Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing of a Proposed Rule Change To Amend the Short Term Option Series Program Related to Qualifying Securities June 29, 2026. 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 June 15, 2026, Nasdaq ISE, LLC (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II 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. 1  15 U.S.C. 78s(b)(1). 2  17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Short Term Option Series Program in Supplementary Material .03 of Options 4, Section 5 with respect to Qualifying Securities. The text of the proposed rule change is available on the Exchange's website at https://listingcenter.nasdaq.com/rulebook/ise/rulefilings, and at the principal office of the Exchange. 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 The Exchange proposes to amend the Short Term Option Series Program in Supplementary Material .03 of Options 4, Section 5. Specifically, the Exchange proposes to amend the Qualifying Securities to: (1) permit the listing of up to two Tuesday and Thursday Expirations for options on certain Exchange-Traded Funds that meet the current criteria in addition to the existing Monday and Wednesday Expirations; and (2) permit the listing of up to two Monday and Wednesday Expirations for options on additional Exchange-Traded Fund Shares that meet new criteria. The Exchange also proposes to designate the Exchange-Traded Fund Shares that meet the current criteria in Supplementary Material .03 to Options 4, Section 5 as “Tier 1 Qualifying Securities” and designate the Exchange-Traded Fund Shares that meet the proposed new set of criteria for Qualifying Securities that would only be permitted to trade up to two Monday and Wednesday Expirations, as “Tier 2 Qualifying Securities.” Background Currently, as set forth in Supplementary Material .03 to Options 4, Section 5, after an option class has been approved for listing and trading on the Exchange as a Short Term Option Series pursuant to Options 1, Section 1(a)(50), 3 the Exchange may open for trading on any Thursday or Friday that is a business day (“Short Term Option Opening Date”) series of options on that class that expire at the close of business on each of the next five Fridays that are business days and are not Fridays in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Friday Short Term Option Expiration Dates”). The Exchange may have no more than a total of five Short Term Option Expiration Dates (“Short Term Option Weekly Expirations”). Further, if the Exchange is not open for business on the respective Thursday or Friday, the Short Term Option Opening Date for Short Term Option Weekly Expirations will be the first business day immediately prior to that respective Thursday or Friday. Similarly, if the Exchange is not open for business on a Friday, the Short Term Option Expiration Date for Short Term Option Weekly Expirations will be the first business day immediately prior to that Friday. 3  Options 1, Section 1(a)(50) provides that a Short Term Option Series means a series in an option class that is approved for listing and trading on the Exchange in which the series is opened for trading on any Monday, Tuesday, Wednesday, Thursday or Friday that is a business day and that expires on the Monday, Wednesday or Friday of the following business week that is a business day, or, in the case of a series that is listed on a Friday and expires on a Monday, is listed one business week and one business day prior to that expiration. If a Tuesday, Wednesday, Thursday or Friday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday, Wednesday, Thursday or Friday. For a series listed pursuant to this section for Monday expiration, if a Monday is not a business day, the series shall expire on the first business day immediately following that Monday. Additionally, the Exchange may open for trading series of options on the symbols provided in Table 1 of Supplementary Material .03 to Options 4, Section 5 that expire at the close of business on each of the next two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are business days beyond the current week and are not business days in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Short Term Option Daily Expirations”). 4 For those symbols listed in Table 1, the Exchange may have no more than a total of two Short Term Option Daily Expirations beyond the current week for each of Monday, Tuesday, Wednesday, and Thursday Expirations, as applicable, at one time. 4  As set forth in Table 1 of Supplementary Material .03 to Options 4, Section 5, the Exchange currently permits expirations in SPY, IWM, QQQ on Mondays, Tuesdays, Wednesdays and Thursdays. Also, the Exchange permits expirations in GLD, SLV and TLT on Mondays and Wednesdays. Finally, the Exchange permits expirations in USO and UNG on Wednesdays. Further, the Exchange may open for trading series of options on the symbols provided in Table 2 of Supplementary Material .03 to Options 4, Section 5 that expire on the close of business on each of the next two Mondays and Wednesdays, respectively, that are business days beyond the current week and are not business days in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Qualifying Securities”). For those symbols listed in Table 2, the Exchange may have no more than a total of two Short Term Option Daily Expirations beyond the current week for each of Monday and Wednesday Expirations, at one time. Qualifying Securities may be eligible individual stocks or Exchange-Traded Fund Shares that meet the following criteria on a quarterly basis: (1) an underlying security, as measured on the last day of the prior calendar quarter, must have: (A) a market capitalization of greater than 700 billion dollars for an individual stock based on the closing price, 5 or 5  The closing price and the opening price shall be that of the primary exchange where the security is listed. (B) Assets under Management (“AUM”) greater than 50 billion dollars for an Exchange-Traded Fund Share based on net asset value (“NAV”); (2) monthly options volume, as measured by sides traded in the last month preceding the quarter end, of greater than 10 million options; (3) a position limit of at least 250,000 contracts; and (4) participate in the Penny Interval Program. Each calendar quarter, the Exchange will apply the above criteria to individual stocks and Exchange-Traded Fund Shares to determine eligibility for the following quarter as a Qualifying Security. Beginning on the second trading day in the first month of each calendar quarter, the market capitalization of individual stocks shall be calculated based on the closing price established on the primary exchange on the last trading day of the prior calendar quarter and the AUM for Exchange-Traded Fund Shares shall be calculated based on the NAV established on the primary exchange on the last trading day of the prior calendar quarter. The data establishing the volume thresholds will be established by using data from the last month of the prior calendar quarter from The Options Clearing Corporation (“OCC”). For options listed on the first trading day of a given calendar quarter, the volume shall be calculated using the last month of the quarter prior to that calendar quarter. 6 ISE provides a list of Qualifying Securities available by close of business on the first trading day of the quarter. 7 Eligible Qualifying Securities are permitted to list two Short Term Option Expiration Dates beyond the current week for each Monday and Wednesday expiration at one time. 8 Qualifying Securities that do not continue to meet the above criteria are no longer permitted to list Monday and Wednesday Expirations beginning on the second day of the following quarter. 6  OCC data becomes available for the end of a quarter on the first trading day of a new quarter. 7  ISE posts this information on its website. 8  With respect to individual stock options, the Exchange does not list an expiry on a day when there will be an Earnings Announcement that takes place after market close with respect to individual stock to avoid permitting an additional expiry on a day where post-close price volatility may be impacted due to the Earnings Announcement. Pursuant to Supplementary Material .03 to Options 4, Section 5, an Earnings Announcement shall include official public quarterly or yearly earnings filed with the Securities and Exchange Commission. Proposal At this time, the Exchange proposes to amend the listing and trading of Qualifying Securities to: (1) permit the listing of up to two Tuesday and Thursday Expirations for options on certain Exchange-Traded Funds that meet the current criteria in addition to the existing Monday and Wednesday Expirations; and (2) permit the listing of up to two Monday and Wednesday Expirations for options on additional Exchange-Traded Fund Shares that meet new additional criteria. As noted above, the Exchange proposes to designate the Exchange-Traded Fund Shares that meet the current criteria in Supplementary Material .03 to Options 4, Section 5 as “Tier 1 Qualifying Securities” and designate the Exchange-Traded Fund Shares that meet the proposed new set of criteria for Qualifying Securities that would only be permitted to trade up to two Monday and Wednesday Expirations, as “Tier 2 Qualifying Securities.” Expansion of Exchange-Traded Fund Shares Qualifying Securities On May 1, 2025, ISE filed a rule proposal, which was approved by the SEC on January 16, 2026, to permit the listing of Qualifying Securities. 9 The Exchange began listing Qualifying Securities on January 26, 2026 on Tesla, Inc. (TSLA); NVIDIA Corporation (NVDA); Apple Inc. (AAPL); iShares Bitcoin Trust ETF (IBIT); Amazon.com, Inc. (AMZN); Meta Platforms, Inc. (META); Broadcom Inc. (AVGO); Alphabet, Inc. (GOOGL); and Microsoft Corporation (MSFT). 10 These securities continue to trade in the current calendar quarter. 9   See Securities Exchange Act Release No. 104624 (January 16, 2026), 91 FR 2806 (January 22, 2026) (SR-ISE-2025-15) (Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Short Term Option Series Program To List Qualifying Securities) (“SR-ISE-2025-15”). 10   See https://www.nasdaqtrader.com/MicroNews.aspx?id=OTA2026-3. IBIT is the only current Qualifying Security that is an Exchange-Traded Fund Share. The Exchange believes that IBIT trading has benefitted from the additional expirations that allowed market participants to precisely hedge their positions in the underlying security. At the time of filing SR-ISE-2025-15, IBIT's position limit was restricted at 25,000 contracts but that position limit increased to 250,000 contracts at a later date, thereby meeting the position limit requirements for a Qualifying Security. 11 The Exchange believes that market participants have been able to utilize the additional expirations in IBIT to closely tailor their investment and hedging decisions in these options which afforded them a reduced premium cost of buying portfolio protection, thus allowing them to better manage their risk exposure in IBIT. Further, the Exchange notes that based on current data, Financial Select Sector SPDR Fund (“XLF”) will meet the criteria for a Qualifying Security in the upcoming calendar quarter. 11  IBIT commenced trading in January 2024 and options on IBIT did not commence trading until November 2024. Tier 1 Expansion At this time, the Exchange proposes to permit the listing and trading of Qualifying Securities on Exchange-Traded Fund Shares that meet the current criteria in Supplementary Material .03 to Options 4, Section 5 to list up to two Tuesday and Thursday Expirations in addition to the existing Monday and Wednesday Expirations and redesignate them as Tier 1 Qualifying Securities. The proposed Tuesday Qualifying Securities expirations on Exchange-Traded Fund Shares for Tier 1 Qualifying Securities will be similar to the current Tuesday Expirations in SPDR S&P 500 ETF Trust (“SPY”), Invesco QQQ Trust (“QQQ”), and iShares Russell 2000 ETF (“IWM”) in Short Term Option Daily Expirations set forth in Supplementary Material .03 to Options 4, Section 5, such that the Exchange may open for trading on any Monday or Tuesday that is a business day series of options on the symbols provided in Table 1 and Table 2 that expire at the close of business on each of the next two Tuesdays that are business days and are not business days in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Tuesday Short Term Option Expiration Date”). 12 In the event Tier 1 Qualifying Securities expire on a Tuesday and that Tuesday is the same day that a standard expiration options series, Monthly Options Series, or Quarterly Options Series expires, the Exchange would skip that week's listing and instead list the following week; the two weeks would therefore not be consecutive. Today, Tuesday Expirations in SPY, QQQ, and IWM similarly skip the weekly listing in the event the weekly listing expires on the same day in the same class as a standard expiration options series, Monthly Options Series, or Quarterly Options Series. 12  They may also trade on Fridays, as is the case for all options series in the Short Term Option Series Program. The proposed Thursday Qualifying Securities expirations on Exchange-Traded Fund Shares for Tier 1 Qualifying Securities will be similar to the current Thursday SPY, QQQ, and IWM in Short Term Option Daily Expirations set forth in Supplementary Material .03 to Options 4, Section 5, such that the Exchange may open for trading on any Wednesday or Thursday that is a business day series of options on the symbols provided in Table 1 and Table 2 above that expire at the close of business on each of the next two Thursdays that are business days and are not business days in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Thursday Short Term Option Expiration Date”). 13 In the event Tier 1 Qualifying Securities expire on a Thursday and that Thursday is the same day that a standard expiration options series, Monthly Options Series, or Quarterly Options Series expires, the Exchange would skip that week's listing and instead list the following week; the two weeks would therefore not be consecutive. Today, Thursday Expirations in SPY, QQQ, and IWM similarly skip the weekly listing in the event the weekly listing expires on the same day in the same class as a standard expiration options series, Monthly Options Series, or Quarterly Options Series. 13   See id. The interval between strike prices for the proposed Tuesday and Thursday Tier 1 Qualifying Securities Expirations will be the same as those currently applicable for SPY, QQQ, and IWM Tuesday and Thursday Expirations (among other symbols that may list a Tuesday or Thursday Expiration) in the Short Term Option Series Program. 14 Specifically, the Tuesday and Thursday Tier 1 Qualifying Securities Expirations will have a strike interval of (i) $0.50 or greater for strike prices below $100, and $1 or greater for strike prices between $100 and $150 for all option classes that participate in the Short Term Option Series Program, (ii) $0.50 for option classes that trade in one dollar increments and are in the Short Term Option Series Program, or (iii) $2.50 or greater for strike prices above $150. 15 As is the case with other equity options series listed pursuant to the Short Term Option Series Program, the Tuesday and Thursday Tier 1 Qualifying Securities Expirations series will be P.M.-settled. 14   See Supplementary Material .03(e) to Options 4, Section 5. 15   See id. Pursuant to Options 1, Section 1(a)(50), with respect to the Short Term Option Series Program, if a Tuesday is not a business day, the series shall expire on the first business day immediately prior to that Tuesday, e.g., Monday of that week if the Tuesday is not a business day. Also, pursuant to Options 1, Section 1(a)(50), with respect to the Short Term Option Series Program, a Thursday expiration series shall expire on the first business day immediately prior to that Thursday, e.g., Wednesday of that week if the Thursday is not a business day. Currently, for each option class eligible for participation in the Short Term Option Series Program, the Exchange is limited to opening thirty (30) series for each expiration date for the specific class. 16 The thirty (30) series restriction does not include series that are open by other securities exchanges under their respective weekly rules; the Exchange may list these additional series that are listed by other options exchanges. 17 With the proposed changes, this thirty (30) series restriction would apply to Tuesday or Thursday Tier 1 Qualifying Securities Expirations as well. In addition, the Exchange will be able to list series that are listed by other exchanges, assuming they file similar rules with the Commission to list Tuesday or Thursday Tier 1 Qualifying Securities Expirations. 16   See Supplementary Material .03(a) to Options 4, Section 5. 17   See id. With this proposal, Tuesday or Thursday Tier 1 Qualifying Securities Expirations would be treated similarly to existing SPY, QQQ, and IWM Tuesday or Thursday Expirations. With respect to standard expiration option series, Tuesday or Thursday Tier 1 Qualifying Securities Expirations will be permitted to expire in the same week in which standard expiration option series on the same class expire. 18 Not listing Tuesday or Thursday Tier 1 Qualifying Securities Expirations for one week every month because there was a standard options series on that same class on the Friday of that week would create investor confusion. 18   See id. Further, as with SPY, QQQ, and IWM Tuesday or Thursday Expirations, the Exchange would not permit Tuesday or Thursday Tier 1 Qualifying Securities Expirations to expire on a business day in which standard expiration option series, Monthly Options Series, or Quarterly Options Series expire. 19 Therefore, all Tuesday or Thursday Tier 1 Qualifying Securities Expirations would expire at the close of business on each of the next two Tuesdays or Thursdays, respectively, that are business days and are not business days in which standard expiration option series, Monthly Options Series, or Quarterly Options Series expire. The Exchange believes that it is reasonable to not permit two expirations on the same day in which a standard expiration option series, Monthly Options Series, or a Quarterly Options Series would expire because those options would be duplicative of each other. 19   See Supplementary Material .03 to Options 4, Section 5. The Exchange does not believe that any market disruptions will be encountered with the introduction of Tuesday or Thursday Tier 1 Qualifying Securities Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire Monday, Tuesday, Wednesday and Thursday on several symbols  20 and has not experienced any market disruptions nor issues with capacity. Today, the Exchange has surveillance programs in place to support and properly monitor trading in Short Term Option Series that expire Monday, Tuesday, Wednesday and Thursday on several symbols. 21 The Exchange believes that it has the necessary capacity and surveillance programs in place to support and properly monitor trading in the proposed Tuesday or Thursday Tier 1 Qualifying Securities Expirations. 20   See supra note 6 [sic] as well as Qualifying Securities in Table 2 in Supplementary Material of Options 4, Section 5. 21   See id. Tier 2 Expansion The Exchange also proposes to permit the listing of up to two Monday and Wednesday Expirations for options on additional Exchange-Traded Fund Shares that meet new additional criteria as Qualifying Securities. The Exchange believes that given the success of listing and trading Monday and Wednesday Expirations on IBIT options, expanding the Qualifying Securities program for Exchange-Traded Funds is appropriate. The Exchange proposes a different set of criteria for Qualifying Securities that are Exchange-Traded Funds that would only be permitted to trade up to two Monday and Wednesday Expirations as follows: an underlying security, as measured on the last day of the prior calendar quarter, must have: AUM greater than 25 billion dollars for an Exchange-Traded Fund Share based on NAV, 22 and monthly options volume, as measured by sides traded in the last month preceding the quarter end, of greater than 5 million options; a position limit of at least 250,000 contracts;  23 and participate in the Penny Interval Program (“Tier 2 Qualifying Securities”). 22  Currently, Exchange-Traded Fund Shares that are Qualifying Securities must have an AUM greater than 25 [sic] billion dollars based on NAV. 23  Currently, Exchange-Traded Fund Shares that are Qualifying Securities must have a monthly options volume, as measured by sides traded in the last month preceding the quarter end, of greater than 10 million options. As with any Qualifying Security, each calendar quarter, the Exchange will apply the above criteria to the proposed new Tier 2 Qualifying Securities to determine eligibility for the following quarter as a Qualifying Security. Beginning on the second trading day in the first month of each calendar quarter, the AUM for Exchange-Traded Fund Shares that are Tier 2 Qualifying Securities shall be calculated based on the NAV established on the primary exchange on the last trading day of the prior calendar quarter. As is the case for all Qualifying Securities, the data establishing the volume thresholds will be established by using data from the last month of the prior calendar quarter from OCC. For options listed on the first trading day of a given calendar quarter, the volume shall be calculated using the last month of the quarter prior to that calendar quarter. 24 ISE will make the list of Qualifying Securities available by close of business on the first trading day of the quarter. 25 24  OCC data becomes available for the end of a quarter on the first trading day of a new quarter. 25  ISE will continue to make this information available on its website. Eligible Qualifying Securities for the proposed Tier 2 Qualifying Securities would be permitted to list two Short Term Option Expiration Dates beyond the current week for each Monday and Wednesday Expirations at one time. Tier 2 Qualifying Securities that do not continue to meet the above criteria would no longer be permitted to list Monday and Wednesday Expirations beginning on the second day of the following quarter. 26 26  The Exchange has noted the additional expirations in Table 2 of Supplementary Material .03 to Options 4, Section 5 along with the criteria for a Qualifying Security for the proposed Tier 2 Qualifying Securities. The proposed Monday Tier 2 Qualifying Securities Expirations will be similar to the Monday Expirations for the existing Qualifying Securities (among other symbols that may list a Monday Expiration) in Short Term Option Daily Expirations set forth in Supplementary Material .03 to Options 4, Section 5, such that the Exchange may open for trading on any Friday or Monday that is a business day (beyond the current week) series of options on Tier 2 Qualifying Securities to expire on any Monday of the month that is a business day and is not a Monday in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire, provided that Monday Expirations that are listed on a Friday must be listed at least one business week and one business day prior to the expiration (“Monday Qualifying Securities Expirations”). 27 In the event Tier 2 Qualifying Securities expire on a Monday and that Monday is the same day that a standard expiration options series, Monthly Options Series, or Quarterly Options Series expires, the Exchange would skip that week's listing and instead list the following week; the two weeks would therefore not be consecutive. Today, Monday Expirations for the existing Qualifying Securities similarly skip the weekly listing in the event the weekly listing expires on the same day in the same class as a standard expiration options series, Monthly Options Series, or Quarterly Options Series. 27  They may also trade on Fridays, as is the case for all options series in the Short Term Option Series Program. The proposed Wednesday Tier 2 Qualifying Securities Expirations will be similar to the current Wednesday Expirations for the existing Qualifying Securities (among other symbols that may list a Wednesday Expiration) in Short Term Option Daily Expirations set forth in Supplementary Material .03 to Options 4, Section 5, such that the Exchange may open for trading on any Tuesday or Wednesday that is a business day (beyond the current week) series of options on Tier 2 Qualifying Securities to expire on any Wednesday of the month that is a business day and is not a Wednesday in which standard expiration options series, Monthly Options Series, or Quarterly Options Series expire (“Wednesday Qualifying Securities Expirations”). 28 In the event Tier 2 Qualifying Securities expire on a Wednesday and that Wednesday is the same day that a standard expiration options series, Monthly Options Series, or Quarterly Options Series expires, the Exchange would skip that week's listing and instead list the following week; the two weeks would therefore not be consecutive. Today, Wednesday Expirations in existing Qualifying Securities similarly skip the weekly listing in the event the weekly listing expires on the same day in the same class as a standard expiration options series, Monthly Options Series, or Quarterly Options Series. 28   See id. The interval between strike prices for the proposed Monday and Wednesday Tier 2 Qualifying Securities Expirations will be the same as those currently applicable for Monday and Wednesday Expirations in existing Qualifying Securities (among other symbols that may list a Monday or Wednesday Expiration) in the Short Term Option Series Program. 29 Specifically, the Monday and Wednesday Tier 2 Qualifying Securities Expirations for the proposed new Exchange-Traded Fund Shares will have a strike interval of (i) $0.50 or greater for strike prices below $100, and $1 or greater for strike prices between $100 and $150 for all option classes that participate in the Short Term Option Series Program, (ii) $0.50 for option classes that trade in one dollar increments and are in the Short Term Option Series Program, or (iii) $2.50 or greater for strike prices above $150. 30 As is the case with other equity options series listed pursuant to the Short Term Option Series Program, the Monday and Wednesday Tier 2 Qualifying Securities Expirations will be P.M.-settled. 29   See Supplementary Material .03(e) to Options 4, Section 5. 30   See id. As noted above, pursuant to Options 1, Section 1(a)(50), with respect to the Short Term Option Series Program, if a Monday is not a business day, the series shall expire on the first business day immediately following that Monday. Also, pursuant to Options 1, Section 1(a)(50), with respect to the Short Term Option Series Program, a Wednesday expiration series shall expire on the first business day immediately prior to that Wednesday, e.g., Tuesday of that week if the Wednesday is not a business day. As noted above, currently, for each option class eligible for participation in the Short Term Option Series Program, the Exchange is limited to opening thirty (30) series for each expiration date for the specific class. 31 The thirty (30) series restriction does not include series that are open by other securities exchanges under their respective weekly rules; the Exchange may list these additional series that are listed by other options exchanges. 32 With the proposed changes, this thirty (30) series restriction would apply to Monday and Wednesday Tier 2 Qualifying Securities Expirations as well. In addition, the Exchange will be able to list series that are listed by other exchanges, assuming they file similar rules with the Commission to list Monday and Wednesday Tier 2 Qualifying Securities. 31   See Supplementary Material .03(a) to Options 4, Section 5. 32   See id. With this proposal, Monday and Wednesday Tier 2 Qualifying Securities Expirations would be treated similarly to existing Monday and Wednesday Qualifying Security Expirations. With respect to standard expiration option series, Monday and Wednesday Tier 2 Qualifying Securities Expirations will be permitted to expire in the same week in which standard expiration option series on the same class expire. 33 Not listing Monday and Wednesday Tier 2 Qualifying Securities Expirations for one week every month because there was a standard options series on that same class on the Friday of that week would create investor confusion. 33   See id. Further, as with existing Monday and Wednesday Qualifying Security Expirations, the Exchange would not permit Monday and Wednesday Tier 2 Qualifying Securities Expirations to expire on a business day in which standard expiration option series, Monthly Options Series, or Quarterly Options Series expire. 34 Therefore, all Monday and Wednesday Tier 2 Qualifying Securities Expirations would expire at the close of business on each of the next two Mondays and Wednesdays, respectively, that are business days and are not business days in which standard expiration option series, Monthly Options Series, or Quarterly Options Series expire. The Exchange believes that it is reasonable to not permit two expirations for the proposed Tier 2 Qualifying Securities on the same day in which a standard expiration option series, Monthly Options Series, or a Quarterly Options Series would expire because those options would be duplicative of each other. 34   See Supplementary Material .03 to Options 4, Section 5. The Exchange does not believe that any market disruptions will be encountered with the introduction of Monday and Wednesday Tier 2 Qualifying Securities Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire Monday, Tuesday, Wednesday and Thursday on several symbols  35 and has not experienced any market disruptions nor issues with capacity. Today, the Exchange has surveillance programs in place to support and properly monitor trading in Short Term Option Series that expire Monday, Tuesday, Wednesday and Thursday on several symbols. 36 The Exchange believes that it has the necessary capacity and surveillance programs in place to support and properly monitor trading in the proposed Monday and Wednesday Tier 2 Qualifying Securities Expirations. 35   See supra note 4. 36   See id. Impact of Proposal The Exchange notes that listings in the Short Term Option Series Program comprise a significant part of the standard listings in options markets. Table 1 demonstrates the percentage of weekly listings in the options industry compared to monthly, quarterly, and Long-Term Option Series for a twelve-month period from January 1, 2025 to May 19, 2026. 37 37  The Exchange sourced this information from OCC. The information includes time averaged data (the number of strikes by maturity date divided from the number of trading days) for all 18 options markets from January 1, 2025 to May 19, 2026. Table 1 EN02JY26.068 While the Exchange is expanding the Short Term Option Series Program to permit Tuesday and Thursday Expirations for Tier 1 Qualifying Securities and Monday and Wednesday Expirations for Tier 2 Qualifying Securities, the Exchange anticipates that it would overall add a small number of weekly expiration dates because the Exchange will limit the number of Qualifying Securities Expirations to two Monday Expirations, two Tuesday Expirations, two Wednesday Expirations, and two Thursday Expirations. Currently, the following Tier 1 Qualifying Securities that are Exchange-Traded Fund Shares would receive Tuesday and Thursday Expirations: IBIT and XLF. Utilizing data for April 2026, the following Exchange-Traded Funds would qualify as Tier 2 Qualifying Securities: VanEck Semiconductor ETF (“SMH”), Energy Select Sector SPDR Fund, (“XLE”) and iShares MSCI Emerging Markets ETF (“EEM”). Expanding the Short Term Option Series Program for IBIT, XLF, SMH, XLE and EEM would account for the addition of approximately 0.16% of strikes. Further, as shown in Table 2, weeklies comprise 59% of the total volume of options contracts. 38 38  The chart represents industry volume in terms of overall contracts. Weeklies comprise 58.5% of volume, as shown in Table 2, while only being 21.1% of the strikes, as shown in Table 1. The Exchange sourced this information from OCC. The information includes data for all 18 options markets from January 1, 2025 to May 19, 2026. Table 2 EN02JY26.069 As is the case with existing Qualifying Securities, inner weeklies (first two weeks) represent higher volume as compared to outer weeklies (the last three weeks) and are more attractive to market participants. In particular, the Exchange looked at the average daily contracts traded in options that met the criteria for a Qualifying Security. Specifically, for IBIT, XLF, SMH, XLE and EEM, the Exchange looked at pre-close movements between 3:30-4:00 p.m. Eastern Time (“ET”) as well as post-close movements between 4:00-5:30 p.m. ET. Table 3, below, references the number of trading days with at least one strike break post close (comparing 4:00 p.m. ET to 5:30 p.m. ET) from January 2023 through May 2026 for the IBIT, XLF, SMH, XLE and EEM as well as SPY, QQQ and IWM. As can be seen plainly, the proposed expanded list of securities represents a significantly lower probability of a strike break historically than SPY, QQQ and IWM. Table 3 EN02JY26.070 Table 4, below, references average annualized closing volatilities (as measured by the standard deviation of 30 seconds returns over the last 30 minutes of trading) for the IBIT, XLF, SMH, XLE and EEM from January 2022 through May 2026. Table 4 demonstrates that IBIT has an average annualized closing volatility of generally greater than 25%, SMH has an average annualized closing volatility of generally less than 25%, and that XLF, EEM and XLE have an average annualized closing volatility of generally less than 20%. Table 4 EN02JY26.071 Table 4, above, demonstrates that SMH and IBIT are more volatile than SPY, QQQ, IWM, XLE, XLF and EEM, however; based on Table 3, the volatility in Table 4 for SMH and IBIT does not impact the customer's exposure to the Contrary Exercise Window from 4:00 p.m. ET to 5:30 p.m. ET timeframe. In fact, the customer exposure is lower than SPY, QQQ and IWM, as demonstrated in Table 3. Per Table 4, IBIT has the highest average return which resides below 30% as measured in annualized volatility. Further, EEM is the least volatile among the symbols per Table 4. Moreover, with respect to Monday and Wednesday Expirations for SMH, XLE and EEM and Tuesday and Thursday Expirations for IBIT and XLF, there does not appear to be any excessive propensity to penetrate  39 strikes post close (4:00 p.m.-5:30 p.m. ET) in comparison to SPY, QQQ and IWM as demonstrated in Table 3. Consequently, the burden of American-style option  40 exercise management on investors is not overwhelming for the proposed Exchange-Traded Fund Shares relative to SPY, QQQ and IWM which have the largest retail participation based on volume in the industry. 39  For purposes of this rule change, “penetrating a strike” refers to the underlying asset's price moving beyond the designated strike price of an option contract. 40  The term “American-style option” means an options contract that, subject to the provisions of Options 6B, Section 1 (relating to the cutoff time for exercise instructions) and to the Rules of the Clearing Corporation, can be exercised on any business day prior to its expiration date and on its expiration date. See Options 1, Section 1(a)(3). The Exchange also reviewed the number of strike breaks for calendar years 2023-2026 for IBIT, XLF, SMH, XLE and EEM between 4:00 p.m. and 5:30 p.m. ET to find the maximum  41 number of strike breaks  42 as well as the mean  43 of the number of strike breaks as evidenced by the various Table 5 charts. Table 5 demonstrates the amount of new strike breaks as a result of the Exchange's proposal for Tier 1 and Tier 2 Qualifying Securities. 41  The term “maximum” refers to the largest instance of strike breaks measured as the number of strikes crossed by the underlying security from the 4:00 p.m. ET closing price to the 9:30 a.m. ET opening price. 42  A strike break is the existence of a strike between the closing price and the opening price on the following day when there has been a penetration of a strike post-close. 43  The term “mean” refers to the average number of strike breaks when there has been a penetration of a strike post-close. Table 5—Monday Charts Security Number of days with strike break Mondays (4:00 p.m. ET- 5:30 p.m. ET) Max (strikes moved Mondays from 4:00 p.m. to 9:30 a.m. next day) when strikes are penetrated from 4:00-5:30 p.m. ET Max (percentage move overnight Mondays when there is a strike break from 4:00 p.m. to 5:30 p.m. ET) Mean strikes moved through Monday when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Monday) 2023 EEM 0 N/A N/A N/A IWM 0 N/A N/A N/A QQQ 0 N/A N/A N/A SMH 1 0.04 0.01 0.04 SPY 1 2.21 0.53 2.21 XLE 1 0.12 0.07 0.12 XLF 0 N/A N/A N/A 2024 EEM 0 N/A N/A N/A IWM 2 0.74 0.37 0.5 QQQ 2 2.35 0.54 1.62 SMH 2 5.89 2.90 3.67 SPY 1 2.2 0.43 2.2 XLE 1 4.94 2.66 4.94 XLF 1 0.5 0.59 0.5 2025   †EEM 0 N/A N/A N/A IWM 1 0.22 0.10 0.22 QQQ 7 14.73 3.48 3.51 SMH 3 8.32 4.50 2.97 SPY 7 17.62 3.49 3.99 XLE 0 N/A N/A N/A XLF 1 0.34 0.33 0.34 2026 EEM 1 1.2 0.97 1.2 IWM 0 N/A N/A N/A QQQ 0 N/A N/A N/A SMH 0 N/A N/A N/A SPY 0 N/A N/A N/A XLE 0 N/A N/A N/A XLF 0 N/A N/A N/A † For Table 5, the Exchange notes that some of the mean strikes moved through Monday when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Monday) in the 2025 chart reflect numbers that were different than the numbers shown in SR-ISE-2025-15. The difference in the numbers is a result of the application of a filter that was applied in this latest analysis to arrive at the last traded price. Specifically, certain prints were excluded because they did not represent genuine, on-time, round-lot executions. The prints that were eliminated were stale mid-day trades reported late, opening and closing auction prints not representing last price, out-of-sequence trades, fractional odd-lots that executed at an off-market price, and quotes that are not actual executions. The application of the filter was de minimis, resulting in two data points in the 2025 tables being amended, the remainder of the tables from the prior rule change remained unaffected. The Table 6 charts, below, reviewed the number of strike breaks for calendar years 2022—2025 for IBIT, XLF, SMH, XLE and EEM between 4:00 p.m. and 5:30 p.m. ET to find the maximum number of strike breaks as well as the mean of the number of strike breaks. Table 6—Tuesday Charts Security Number of days with strike breaks through Tuesdays (4:00 p.m. ET- 5:30 p.m. ET) Max (strikes moved through Tuesdays from 4:00 p.m. to 9:30 a.m. next day) when strikes are penetrated from 4:00-5:30 p.m. ET Max (percentage move overnight Tuesdays when there is a strike break from 4:00 p.m. to 5:30 p.m. ET) Mean strikes moved through Tuesday when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Tuesday) 2023 IWM 0 N/A N/A N/A QQQ 3 4.91 1.70 3.17 SPY 3 3.18 0.70 1.5 XLF 0 N/A N/A N/A 2024 IBIT ** 1 4.28 4.14 4.28 IWM 2 3.54 1.73 2.41 QQQ 8 10.67 2.33 4.39 SPY 3 7.11 1.31 5.27 XLF 1 0.8 0.96 0.8 2025 IBIT 5 4.14 3.28 2.15 IWM 2 5.54 2.96 2.78 QQQ 11 13.79 3.10 4.4 SPY 7 13.17 2.50 3.5 XLF 0 N/A N/A N/A 2026 IBIT 1 1.36 1.27 1.36 IWM 3 8.8 3.48 4.95 QQQ 5 5.91 0.92 4.21 SPY 4 5.56 0.85 4.09 XLF 0 N/A N/A N/A ** IBIT commenced trading in January 2024 and options on IBIT did not commence trading until November 2024. Table 7—Wednesday Charts Security Number of days with strike break through Wednesdays (4:00 p.m. ET—5:30 p.m. ET) Max (strikes moved through Wednesdays from 4:00 p.m. to 9:30 a.m. next day) when strikes are penetrated from 4:00-5:30 p.m. ET Max (percentage move overnight Wednesdays when there is a strike break from 4:00 p.m. to 5:30 p.m. ET) Mean strikes moved through Wednesdays when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Wednesdays) 2023 EEM 0 N/A N/A N/A IWM 2 1.09 0.63 0.87 QQQ 6 7.59 2.29 4.38 SMH 7 16.76 6.48 7.12 SPY 5 4.08 0.99 2.63 XLE 3 2.92 1.62 1.03 XLF 1 0.12 0.19 0.12 2024 EEM 0 N/A N/A N/A IWM 1 2.22 1.02 2.22 QQQ 16 11.16 2.37 4.16 SMH 7 10.67 5.43 3.32 SPY 7 9.67 1.72 4.79 XLE 0 N/A N/A N/A XLF 0 N/A N/A N/A 2025 *** EEM 2 1.84 2.10 1.27 IWM 2 9.52 4.70 5.3 QQQ 15 19.87 4.17 6.06 SMH 6 4.67 5.35 3.61 SPY 10 19.45 3.45 7.24 XLE 0 N/A N/A N/A XLF 1 3.9 3.89 3.9 2026 EEM 0 N/A N/A N/A IWM 1 1.09 0.40 1.09 QQQ 5 5.68 0.94 2.01 SMH 6 1.97 0.99 1.26 SPY 4 5.27 0.77 2.66 XLE 0 N/A N/A N/A XLF 0 N/A N/A N/A *** For Table 7, the Exchange notes that some of the mean strikes moved through Wednesdays when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Monday) in the 2025 chart reflect numbers that were different than the numbers shown in SR-ISE-2025-15. The difference in the numbers is a result of the application of a filter that was applied in this latest analysis to arrive at the last traded price. Specifically, certain prints were excluded because they did not represent genuine, on-time, round-lot executions. The prints that were eliminated were stale mid-day trades reported late, opening and closing auction prints not representing last price, out-of-sequence trades, fractional odd-lots that executed at an off-market price, and quotes that are not actual executions. The application of the filter was de minimis, resulting in two data points in the 2025 tables being amended, the remainder of the tables from the prior rule change remained unaffected. Table 8—Thursday Charts Security Number of days with strike break through Thursdays (4:00 p.m. ET—5:30 p.m. ET) Max (strikes moved through Thursdays from 4:00 p.m. to 9:30 a.m. next day) when strikes are penetrated from 4:00-5:30 p.m. ET Max (percentage move overnight Thursdays when there is a strike break from 4:00 p.m. to 5:30 p.m. ET) Mean strikes moved through Thursdays when there is an instance of move through (from 4:00 p.m. to 5:30 p.m. Thursdays) 2023 IWM 0 N/A N/A N/A QQQ 5 7.08 2.27 2.15 SPY 3 5.18 1.24 2.51 XLF 0 N/A N/A N/A 2024 IBIT 2 1.4 1.28 0.92 IWM 0 N/A N/A N/A QQQ 11 9.08 1.98 3.53 SPY 5 7.43 1.37 3.44 XLF 0 N/A N/A N/A 2025 IBIT 6 4.8 3.72 2.79 IWM 0 N/A N/A N/A QQQ 12 9.8 1.91 3.82 SPY 7 5.55 0.94 2.39 XLF 1 0.2 0.20 0.2 2026 IBIT 0 N/A N/A N/A IWM 1 3.88 1.46 3.88 QQQ 7 6.8 1.05 3.75 SPY 7 6.22 0.90 2.99 XLF 1 1.08 1.01 1.08 Because the Exchange proposes to limit the number of Monday, Tuesday, Wednesday and Thursday Qualifying Securities Expirations to two expirations beyond the current week, the Exchange believes that the addition of these Tier 1 and Tier 2 Qualifying Securities Expirations, as applicable, should encourage Market Makers to continue to deploy capital more efficiently and improve displayed market quality. 44 Utilizing IBIT, XLF, SMH, XLE and EEM as a proxy, the marginal increase in the number of occurrences of strike breaks in 2023 would be 13 with the addition of these expirations. Also, the marginal increase in the number of occurrences of strike breaks in 2024 would be 15 with the addition of these expirations. Further, there would be a marginal increase of 25 instances of strike breaks in 2025. Finally, there would be a marginal increase of 9 instances of strike breaks in 2026. 44  Market Makers include Primary Market Makers and Competitive Market Makers. See Options 1, Section 1(a)(21). Today, Primary Market Makers and Competitive Market Makers are required to quote a specified time in their assigned options series. See Options 2, Section 5. In the observed time period (2023 to 2026), there would be a marginal increase of 11 instances of strike breaks on Monday Expirations after regular trading hours. There would be a marginal increase of 8 instances of strike breaks on Tuesday Expirations after regular trading hours. There would be a marginal increase of 33 instances of strike breaks on Wednesday Expirations after regular trading hours. There would be a marginal increase of 10 instances of strike breaks on Thursday Expirations after regular trading hours. Similar to SPY, QQQ and IWM Monday, Tuesday, Wednesday and Thursday Expirations, the introduction of Monday and Wednesday for Tier 2 and Tuesday and Thursday for Tier 1 Qualifying Securities Expirations will, among other things, expand hedging tools available to market participants and allow for a reduced premium cost of buying portfolio protection. The Exchange believes that the proposal would permit only the most liquid securities to have the additional Tier 1 Tuesday and Thursday Expirations and Tier 2 Monday and Wednesday Expirations. The Exchange believes that offering these additional expirations in the Qualifying Securities would permit Market Makers and other market participants to precisely hedge their positions in the underlying security with the additional expirations. Finally, the Exchange considered the impact of a market participant's propensity to rationally exercise outstanding options contracts by the tender of an exercise notice (“Contrary Exercise Advice”). 45 Specifically, ISE examined SPY data from April 2, 2025 (a day where there was a significant drop after the close). 46 On April 2, 2025, SPY settled at 4:00 p.m. at $564.52. 47 At 5:00 p.m., SPY was trading at $552.42. 48 Every call option with a April 2, 2025 expiration date and a strike price below $564 was automatically exercised by OCC, unless OCC received Contrary Exercise Advices from a market participant. 49 ISE obtained the amount of long open interest in the customer or “C” range  50 at OCC starting at the close of the prior trading day and added customer long activity that executed on April 2, 2025 to that figure. 51 Next, ISE subtracted the liquidating activity for customers, and examined the quantity of Contrary Exercise Advices received by OCC on April 2, 2025 and compared that figure to the number of customers that did not abandon their calls rationally relative to the number of customers who entered into options contracts. The data below in Table 9 and Table 10  52 applies to calls in SPY in the customer range at OCC for expiration date April 2, 2025. 45  A Contrary Exercise Advice may be exercised during the time period specified in the Rules of the Clearing Corporation by the tender to the Clearing Corporation of an exercise notice in accordance with the Rules of the Clearing Corporation. An exercise notice may be tendered to the Clearing Corporation only by the Clearing Member in whose account such options contract is carried with the Clearing Corporation. Members may establish fixed procedures as to the latest time they will accept exercise instructions from customers. See Options 6B, Section 1. Option holders have until 5:30 p.m. Eastern Time (“ET”) on the business day of expiration, or, in the case of a standardized equity option expiring on a day that is not a business day, on the business day immediately prior to the expiration date to make a final exercise decision to exercise or not exercise an expiring option. Members may not accept exercise instructions for customer or non-customer accounts after 5:30 p.m. ET. See FINRA Rule 2360(a)(23)(A)(iii). A Contrary Exercise Advice is a form approved by the national options exchanges, FINRA or The Options Clearing Corporation for use by a member to submit a final exercise decision committing an options holder to either: (1) not exercise an option position which would automatically be exercised pursuant to The Options Clearing Corporation's Ex-by-Ex procedure; or (2) to exercise a standardized equity option position which would not automatically be exercised pursuant to The Option