Information Notice - 1/3/25

What Changed

• The primary regulatory modification addresses a single-day exception to standard options exercise procedures:
• CEA Cut-Off Time Acceleration: The normal 5:30 p.m. ET deadline for submitting Contrary Exercise Advice was compressed to 10:00 a.m. ET on January 9, 2025.
• Exercise Instruction Acceptance Window: Members could not accept exercise instructions for either customer or non-customer accounts after 10:00 a.m. ET on that date.
• OCC Processing Unchanged: The Options Clearing Corporation's processing timeframes remained unaffected by the market closure.
• Restricted Exercise Classes: Exercises in non-expiring American-style, cash-settled index options and non-expiring American-style, cash-settled FLEX ETF option classes were prohibited on January 9, 2025, due to the national options exchanges' closure
• Standard Procedures Restored: All other options retained normal exercise advice and CEA cut-off times.

Suggested Considerations

• *Update Internal Procedures: Modify systems and workflows to enforce the 10:00 a.m. ET cut-off instead of the standard 5:30 p.m. ET deadline for January 9, 2025 options
• *System Configuration: Reprogram trading platforms, order management systems, and compliance monitoring tools to reject exercise instructions received after 10:00 a.m. ET on that date
• *Staff Communication: Notify all relevant personnel (trading desk, operations, compliance, customer service) of the accelerated deadline and restricted exercise classes
• *Customer Notification: Inform retail and institutional clients of the early cut-off time for options expiring on January 9, 2025
• *Submission Coordination: Ensure CEA submissions to exchanges and OCC occur within the compressed timeframe
• *Documentation: Maintain time-stamped records of all exercise instructions and CEA submissions for audit purposes

Key Dates

Who is Affected