NYSE American amends FLEX option rule to expand cash-settled ETFs
The amendment, effective immediately upon filing on September 16, 2026, applies to FLEX equity options on eligible ETFs traded on NYSE American.
On September 16, 2026, NYSE American LLC filed a proposed rule change with the Securities and Exchange Commission under Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4. The filing, identified as Release No. 34-106522 and File No. SR-NYSEAMER-2026-86, was announced in a notice published on September 29, 2026 (FR Doc No: 2026-20195) and is effective immediately.
The amendment targets Rule 903G, which governs the terms of Flexible (FLEX) Options. It would permit newly FLEX-eligible exchange-traded funds (ETFs) that meet heightened eligibility thresholds of $600 million average daily notional value and 5,616,000 shares average daily volume, based on the previous one-month period, to be eligible for cash settlement as a contract term. It also establishes tiered criteria for handling cash-settled FLEX ETF options when an underlying ETF no longer satisfies those thresholds at the time of the Exchange's bi-annual review, and it removes the existing provision that limits cash settlement to no more than 50 underlying ETFs.
The proposal mirrors substantially identical changes recently adopted by Cboe Exchange, Inc., Nasdaq ISE, LLC, and Nasdaq PHLX Exchange. The current framework, adopted in February 2020, allows cash settlement for up to 50 FLEX Equity Options on ETFs with an average daily notional value of $500 million or more and a national average daily volume of 4,680,000 shares, measured over the prior six-month period.
Under the existing system, the Exchange conducts bi-annual reviews on January 1 and July 1 to identify qualifying ETFs. NYSE American has submitted two annual monitoring reports covering the past two years of trading, finding no manipulation concerns, no open investigations, and no recommendations for enhancements to the listing standards.
The Commission is soliciting comments on the proposed rule change from interested persons. Comments must be submitted in accordance with the procedures outlined in the notice.
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