BOX Exchange adopts rules for electronic trading of FLEX equity options

On November 4, 2026 the Securities and Exchange Commission published a notice that BOX Exchange LLC filed a proposed rule change on October 21, 2026 (Release No. 34-106819; File No. SR-BOX-2026-21; FR Doc No. 2026-22756, Vol. 91, No. 215, pp. 70943-70952). The filing seeks immediate effectiveness of amendments to the Exchange's rulebook governing FLEX Equity Options.

The proposal amends Rule 5055 (FLEX Equity Options) and Rule 7240 (Complex Orders) and adds Rule 7155 (FLEX Price Improvement Period) and Rule 7275 (FLEX Solicitation Auction). It removes the language in Rule 5055(b)(3) that limited FLEX Equity Options to floor-only orders, replacing it with a provision that FLEX Equity Options may be traded only under the new Rules 7155, 7275, or the existing Rule 7605 (FOO Orders). New subparagraphs (4) and (5) in Rule 5055(f) address intra-day handling of non-FLEX legs of FLEX Complex or Multi-Leg Orders. Rule 5055(l) is amended to require a Letter of Authorization from a clearing member for both floor brokers and Order Flow Providers.

The purpose of the change is to permit electronic auction trading of FLEX Equity Options, mirroring practices at CBOE, Nasdaq PHLX and Nasdaq ISE while preserving distinctions such as the exclusion of percentage-based pricing and the omission of CBOE's electronic FLEX auctions defined in Rule 5.72(c). The proposed FLEX Price Improvement Period (FLEX PIP) auction is modeled on CBOE's FLEX AIM, with noted differences.

The filing introduces definitions for "FLEX Complex Order" and "FLEX Multi-Leg Order," both described as electronic orders composed of FLEX Equity Options sharing the same underlying security and exercise style. Participants approved to trade FLEX Equity Options - referred to as Initiating FLEX Participants - may submit FLEX PIP orders or solicited primary improvement orders in the electronic auction environment.

FLEX Equity Options and the associated FLEX Open Outcry (FOO) orders were originally approved for trading on BOX on May 15, 2024. The current proposal expands that framework to the Exchange's electronic market, subject to the immediate effectiveness date of October 21, 2026.