[Federal Register Volume 90, Number 110 (Tuesday, June 10, 2025)]
[Notices]
[Pages 24471-24476]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-10444]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103184; File No. SR-CBOE-2025-038]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Opening Process for Simple Orders in Exclusively Listed Index
Option Classes
June 4, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 22, 2025, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its opening process for simple orders in exclusively listed
index option classes.\3\ The text of the proposed rule change is
provided in Exhibit 5.
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\3\ An ``exclusively listed option'' is an option that may trade
exclusively on an exchange (and its affiliated exchange) because the
exchange has an exclusive license to list and trade the option or
has the proprietary rights in the interest underlying the option. An
exclusively listed option is different than a ``singly listed
option,'' which is an option that is not an ``exclusively listed
option'' but that is listed by one exchange and not by any other
national securities exchange.
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The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
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 Rule 5.31 regarding its opening
process for simple orders for products it may exclusively list on the
Exchange (except for SPX constituent option series on exercise
settlement value determination dates \4\).
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\4\ See Rule 5.31(j).
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Current Standard Opening Process
Currently, following the occurrence of an opening rotation trigger
pursuant to Rule 5.31(d), the System conducts an opening rotation for
an option series. Following the opening rotation trigger, the System
conducts the Maximum Composite Width Check pursuant to Rule 5.31(e)(1)
to determine if a series is eligible to open. If the Composite Market
\5\ of a series is not crossed, and the Composite Width \6\ of the
series is less than or equal to the Maximum Composite Width (as defined
in Rule 5.31(a)), the series is eligible to open. Additionally, if the
Composite Market of a series is not crossed, and the Composite Width of
the series is greater than the Maximum Composite Width, but there are
(i) no non-M Capacity \7\ (a) market orders or (b) buy (sell) limit
orders with prices higher (lower) than the Composite Market midpoint
and (ii) no orders or quotes marketable against each other, the series
is eligible to open. Once a series become eligible to open, the System
conducts the opening auction for the series (i.e. determines the
opening trade price pursuant to Rule 5.31(e)(2) and opens the series
pursuant to Rule 5.31(e)(3)). The Exchange may also determine to compel
a series to open in the interest of fair and orderly markets, including
if the opening width
[[Page 24472]]
is wider than the Maximum Composite Width, pursuant to Rule 5.31(h).
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\5\ The term ``Composite Market'' means the market for a series
comprised of (1) the higher of the then-current best appointed
Market-Maker bulk message bid on the Exchange and the away best bid
(``ABB'') (if there is an ABB) and (2) the lower of the then-current
best appointed Market-Maker bulk message offer on the Exchange and
the away best offer (``ABO'') (if there is an ABO). The term
``Composite Bid (Offer)'' means the bid (offer) used to determine
the Composite Market. See Rule 5.31(a).
\6\ The term ``Composite Width'' means the width of the
Composite Market (i.e., the width between the Composite Bid and the
Composite Offer) of a series. See Rule 5.31(a).
\7\ A non-M Capacity order is a non-Market Maker order. See Rule
1.1, definition of Capacity for a list of other Capacities that may
be attached to an order.
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Currently, if a series cannot satisfy these conditions described
above (and thus is not eligible to open), if there is no Composite
Market, or if the Composite Market of a series is crossed, the series
is ineligible to open.\8\ When that occurs, the Queuing Period \9\ for
the series continues (including the dissemination of opening auction
updates) until (i) the Maximum Composite Width Check is satisfied and
the Composite Market is not crossed; (ii) there are (a) no non-M
Capacity (x) market orders or (y) buy (sell) limit orders with prices
higher (lower) than the Composite Market midpoint and (b) no orders or
quotes marketable against each other if the Maximum Composite Width is
not satisfied and the Composite Market is not crossed, or (iii) the
Exchange determines to open the series pursuant to Rule 5.31(h). As
described further herein, the Exchange may now manually increase the
prescribed Maximum Composite Width during the Queuing Period in order
to open up an exclusively listed option series.\10\
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\8\ See Rule 5.31(e)(1)(C).
\9\ The term ``Queuing Period'' means the time period prior to
the initiation of an opening rotation during which the System
accepts orders and quotes in the Queuing Book (the book into which
Users may submit orders for participation in the opening rotation)
for participation in the opening rotation for the applicable trading
session. See Rule 5.31(a).
\10\ See the definition of Maximum Composite Width, which
permits the Exchange to modify the Maximum Composite Width during
the opening auction process (which modifications the Exchange
disseminates to all subscribers via the Exchange's data feeds that
deliver opening auction updates) in Rule 5.31(a).
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Current Forced Opening Procedures for Equity and ETP Options Classes
However, currently, if a series in an equity or ETP option class is
unable to open because it does not satisfy the Maximum Composite Width
Check within an Exchange-designated time period (and (i) the Composite
Market is not crossed and (ii) no non-M Capacity order crosses the
Composite Market midpoint) \11\, the System forces the series to open
after that time period upon the System's observation of an ABBO \12\
(with a non-zero offer) for the series.\13\
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\11\ The Exchange proposes to modify the existing forced open
rule for equity and ETP option classes to clarify that it will not
force the open if there are non-M Capacity orders that cross the
Composite Market midpoint. While the Exchange currently follows this
process, it proposes to make this clear in its rule as well.
\12\ The term ``ABBO'' means the best bid(s) or offer(s)
disseminated by other Eligible Exchanges (as defined in Rule 5.65)
and calculated by the Exchange based on market information the
Exchange receives from OPRA. See Rule 1.1.
\13\ See Rule 5.31(e)(4).
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Background on the Current Opening Procedures for Exclusively Listed
Options
As mentioned above, and as described further herein, the Exchange
may now manually force open a series that does not satisfy the Maximum
Composite Width by increasing the prescribed Maximum Composite Width
during the Queuing Period in order to open up a series.\14\ The
Exchange currently exercises more discretion through this manual
process then it would through the proposed automated process as it must
manually review which series are not open and can determine whether it
wants to force the series open. In neither the existing process nor in
the proposed automated process through the proposed modified forced
open rule is there are an ABBO looked to (as it does not exist).
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\14\ See the definition of Maximum Composite Width, which
permits the Exchange to modify the Maximum Composite Width during
the opening auction process (which modifications the Exchange
disseminates to all subscribers via the Exchange's data feeds that
deliver opening auction updates) in Rule 5.31(a).
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However, under the existing manual process to increase the Maximum
Composite Width, if there are no Market Maker orders, and thus no
Composite Width for the Exchange to manually increase, a series will
not open, unless the Exchange deems it necessary for fair and orderly
markets and opens a series pursuant to Rule 5.31(h). The new rule
proposes that a forced open shall occur if there is no Composite Market
so long as there are no non-M Capacity orders that are crossed. As
described in further detail below, the Exchange believes this is in the
best interest of market participants, as the exclusively listed options
generally have a strong floor presence in addition to the on-screen
liquidity--it may be the case that while there is no Composite Market
on screen, there are Market Makers on the floor that can fill the
customer orders. Of further note, it is also the case for some Market
Makers that they may not provide on-screen liquidity until after they
receive the opening trigger notification. For these reasons, the
Exchange believes it is in the best interest to open up these series
even if no Composite Market exists and no non-M Capacity orders are
crossed.
The Exchange also notes that it may use Rule 5.31(h) to deviate
from the standard opening process, including: (i) adjusting the timing
of the opening rotation in any option class, (ii) modifying any time
periods described in Rule 5.31, and (iii) compelling a series open,
even if the Maximum Composite Width check is not satisfied, but these
events may only happen manually if the Exchange determines it is
necessary in the interests of a fair and orderly market. The Exchange
notes that it will retain this authority still under the new proposed
forced opening rule.
Proposed Forced Opening Procedures for Exclusively Listed Options
The proposed rule change expands the existing forced opening
provision to now apply to exclusively listed option series, except that
(i) the ABBO will not be used as a triggering factor to open a series
as there is no ABBO for the exclusively listed option series and (ii)
the series may open if there is no Composite Market so long as there
are no non-M Capacity orders that are crossed.\15\ Similar to equity or
ETP option classes, the series will not open if the Composite Market is
crossed or if there are non-M Capacity orders that cross the Composite
Market midpoint.
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\15\ The proposed forced opening process has no impact on the
modified opening auction process set forth in Rule 5.31(j) and would
not apply to SPX constituent option series on exercise settlement
value determination days.
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Specifically, as proposed, if a series in an exclusively listed
option class is unable to open because it does not satisfy the Maximum
Composite Width Check described above within a time period (which the
Exchange determines for exclusively listed options \16\) after the
occurrence of the opening rotation trigger for the class pursuant to
Rule 5.31(d), and (i) the Composite Market is not crossed and no non-M
Capacity order crosses the Composite Market midpoint or (ii) there is
no Composite Market and there are no non-M Capacity orders that are
crossed, the System forces the series to open after that time period.
For a series subject to a forced opening, the opening trade price
determination and series open set forth in Rule 5.31(e)(2) and (3)
(i.e., the opening auction) do not occur; instead, the System opens the
series without a
[[Page 24473]]
trade. This will permit a series to open for trading on the Exchange
even though the market for the series on the Exchange may be wide (or
if there are no quotes or orders on the book).\17\ As described above,
the two primary distinctions between the existing manual process that
is used to manually open exclusively listed options, where the Maximum
Composite Width is manually widened, and the proposed forced opening
process for exclusively listed options, are (i) the proposed automated
process is more efficient and transparent process and (ii) an
exclusively listed option series may still open even if there is no
Composite Market so long as no non-M Capacity orders are crossed.
However, as previously noted, the Exchange may also open up a series if
it deems so necessary in the interest of a fair and orderly market
pursuant to Rule 5.31(h).
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\16\ The proposed rule change permits the Exchange to determine
one time period for all exclusively listed options and one time
period for equity and ETP classes, which may be the same time
period. The Exchange believes in doing so, it can best adapt to
unique changes with its exclusively listed options to account for
the fact that its exclusively listed options are also traded during
GTH session and, in addition to being traded electronically (as the
equity and ETP classes are), they are also traded open outcry as
well.
\17\ The Exchange notes that a wide market is not a reason
enough for not opening as a wide market may occur at any point
during the trading day. As described further herein, it is more of a
risk for participants to keep the market closed, preventing
participants from managing their position exposure as other markets
are already open.
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If a series satisfies the Maximum Composite Width Check prior to
the end of the Exchange-determined time period, the series opens
pursuant to Rule 5.31(d)(2) and (3) (i.e., the standard opening auction
process occurs for the series). For example, suppose the Exchange
determined the ``forced opening'' timer for exclusively listed option
series to be three minutes. If the opening trigger for an exclusively
listed option series occurs at 9:30:05 Eastern time but the series does
not satisfy the Maximum Composite Width Check after the trigger, the
System will force the series open after 9:33:05 Eastern time. However,
if the series satisfies the Maximum Composite Width Check at 9:32:30,
the series will open at that time in accordance with the normal opening
auction process. The current rule still allows the market to open even
if the market is wide by (i) manually increasing the Maximum Composite
Width \18\ or (ii) allowing the series to open in accordance with Rule
5.31(e)(1)(B), which allows the series to open if the Composite Market
of a series is not crossed, and the Composite Width of the series is
greater than the Maximum Composite Width, but there are (i) no non-M
Capacity (a) market orders or (b) buy (sell) limit orders with prices
higher (lower) than the Composite Market midpoint and (ii) no orders or
quotes marketable against each other.
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\18\ See supra note 16.
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No ABBO Requirement for Exclusively Listed Options
Given the current method of manually increasing the Maximum
Composite Width as a way to force a series open if it does not satisfy
the Maximum Composite Width, the Exchange believes the proposed rule is
a better alternative to open up a series for trading, as it allows for
greater transparency and clearer expectations for market participants,
as well as taking away the possibility of error from manual human
intervention. As described further herein, the ABBO is not a
requirement for the standard opening process for any option classes,
including equity and ETP option classes. Specifically, if no away
markets are open in a series, there would be no ABBO for that series
and thus the Composite Market for the series (and thus whether the
series would open) would be based solely on the Exchange's market for
the series. Further, if the ABBO is wider than the Exchange's market
for a series, the ABBO is also not a factor into whether the System
opened the series. In those cases, whether an equity or ETF option
series satisfied the Maximum Composite Width check would be based
solely on the Exchange's market. With respect to the forced opening
process for equity and ETP option classes, it may even be the case that
the ABBO is wider than the Exchange's market.
Differences Between the Forced Opening Process for Equity and ETP
Option Classes and the Proposed Process for Exclusively Listed Options
The Exchange notes that it previously adopted a similar process to
force an open for series in an equity or exchange-traded product option
classes.\19\ The only substantive differences within these two
processes is that (i) the process for exclusively listed options will
not rely on the additional requirement that the system observes an ABBO
after the designated time period passes since exclusively listed
options will not have an ABBO as the products are not listed on any
other exchange and (ii) exclusively listed option series may open if
there is no Composite Market so long as there are no non-M Capacity
orders that are crossing.
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\19\ See Securities Exchange Act Release No. 90967 (January 22,
2021), 86 FR 7429 (January 28, 2021) (SR-CBOE-2021-005).
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With the exception that there is not an ABBO that may be looked at
first and that a Composite Market is not required to exist (so long as
there are no non-M Capacity orders that are crossed), all other
protections that were put into place during the inception of the forced
open for equity and ETP classes will also apply to the proposed forced
open for exclusively listed options. Rule 5.31(f) provides that in the
event of a forced opening of a series pursuant to proposed Rule
5.31(e)(4) or a compelled opening of a series pursuant to paragraph
(h), the System enters all of a User's orders in that series in the
Queuing Book \20\ into the Book in the manner set forth in current Rule
5.31(f), unless a User instructs the System to cancel its market orders
or all of its orders, in which case the System enters only the non-
cancelled orders into the Book in this manner. Specifically, they will
be processed in accordance with Rule 5.32 (as unexecuted orders and
quotes are handled following the conclusion of the opening rotation),
which describes how the System processes, handles, and executes orders.
If any order or quote in the Queuing Book is marketable upon the forced
opening (and the User does not instruct the System to cancel it as
proposed), the System would execute marketable orders subject to the
priority rules set forth in Rule 5.32. Any non-marketable order would
enter the Book or cancel, subject to the User instructions. This
proposed change provides Users with flexibility for automated handling
of their orders in the event an exclusively listed option series opens
with a wide market as opposed to the existing manual process where the
Exchange manually increases the Maximum Composite Width to force an
open.\21\
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\20\ The term ``Queuing Book'' means the book into which Users
may submit orders and quotes (and onto which GTC and GTD orders
remaining on the Book from the previous trading session or trading
day, as applicable, are entered) during the Queuing Period for
participation in the applicable opening rotation. Orders and quotes
on the Queuing Book may not execute until the opening rotation. The
Queuing Book for the GTH opening auction process may be referred to
as the ``GTH Queuing Book,'' and the Queuing Book for the RTH
opening auction process may be referred to as the ``RTH Queuing
Book. See Rule 5.31(a).
\21\ See supra note 16.
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SPX Constituent Option Series
Lastly, the Exchange proposes to amend Rule 5.31(e)(4) to not apply
the proposed forced opening process to the opening of the SPX
constituent option series on exercise settlement value determination
dates, as the opening auction process currently set forth in Rule
5.31(j) to calculate the exercise or
[[Page 24474]]
final settlement, as applicable, of expiring VIX derivatives shall
still apply to those series on those dates. Therefore, SPX constituent
option series will open pursuant to Rule 5.31(j) on exercise settlement
value determination dates.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\22\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \23\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \24\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\22\ 15 U.S.C. 78f(b).
\23\ 15 U.S.C. 78f(b)(5).
\24\ Id.
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In particular, the Exchange believes the proposed forced opening
process for simple orders in its exclusively listed option series will
remove impediments to and perfect the mechanism of a free and open
market and a national market system and protect investors. The proposed
rule change will provide for a series to open for trading on the
Exchange sooner than it may automatically open currently. The Exchange
believes the proposed rule change will benefit investors, because it
may permit these options to open sooner and increase the times during
which investors may conduct trading in these options, allowing
participants to trade, hedge exposure, and exit positions in a timely
manner. While the width of Market-Maker quotes on the Exchange (and
thus the Composite Width) for an exclusively listed option series may
be wider than the Maximum Composite Width \25\ or, no Market-Maker
quotes for an exclusively listed option series are present in the book
(and thus there is no Composite Market for the series), the Exchange
believes it is reasonable to open the series after a certain amount of
time has passed. The Exchange further notes that it does not believe
wide Market Maker quotes in and of itself is an adequate reason to
delay the opening, as that may occur at any time during the trading
day. The Exchange understands from customers they would prefer to be
able to begin trading the Exchange's exclusively listed index options
without undue delay, even in a wide market, in a timeframe more closely
aligned with equities and ETP options \26\ (there have been delays as
long as ten to fifteen minutes after markets open). A delayed opening
may leave participants unable to efficiently hedge, exit, and otherwise
manage positions as needed, particularly because the value of the index
may be changing given that the stocks comprising the index are open for
trading. As a result, a delayed opening may create more investment risk
for market participants than opening with a market comprised of wide or
no Market-Maker quotes (which as noted above, is a market condition
that may occur at any time). Additionally, the proposed ability of
Users to cancel orders in the event of a forced opening will provide
Users with additional protection.
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\25\ The Exchange notes pursuant to Rule 5.31(e)(1)(B), there
are currently instances in which the Exchange will open for trading
despite the Composite Market Width being larger than the Maximum
Composite Width.
\26\ See Rule 5.31(e)(4).
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As discussed above, the Exchange currently has the authority, when
it deems necessary, to deviate from the standard opening process,
including: (i) adjusting the timing of the opening rotation in any
option class, (ii) modifying any time periods described in Rule 5.31,
and (iii) compelling a series open, even if the Maximum Composite Width
check is not satisfied, but these events may only happen manually if
the Exchange determines it is necessary in the interests of a fair and
orderly market.\27\ The proposed rule change is consistent with the
authority granted under Rule 5.31(h). Furthermore, this proposed rule
change creates an automated compelled opening in certain circumstances
by not needing to rely on the manual process of increasing the Maximum
Composite Width that may currently be used under the definition of
Maximum Composite Width under Rule 5.31(a), with the exception that a
series may be forced open under this proposed rule even if no Composite
Market exists, so long as there are no non-M Capacity orders crossed.
This will benefit investors by providing additional transparency to the
Rules regarding when a series may open despite not satisfying the
Maximum Composite Width check as well as remove impediments to and
perfect the mechanism of a free and open market and a national market
system by automating an otherwise manual process. Furthermore, the
Exchange believes it is in the best interest of investors to allow an
exclusively listed option series to open even if there is no Composite
Market, so long as no non-M Capacity orders are crossed, as there may
be liquidity on the floor from Market Makers. This continues to protect
customer orders from executing at the open at a potentially erroneous
price given that the requirement that there be no non-M Capacity orders
crossed. By allowing these markets to open in a timely manner, market
participants would be able to have their orders filled and manage their
existing positions earlier, thus reducing potential investment risk
associated with further delaying the open.
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\27\ See Rule 5.31(h).
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Further, as discussed above, the Exchange believes it is in the
best interest of market participants to allow the Exchange discretion
to determine a different time period for its exclusively listed options
that may be different from the time period for its equity and ETP
options. As noted, there are differences that between these groups,
notably, that exclusively listed options also trade in an open outcry
market in addition to trading electronically (equity and ETP options
are only traded electronically on the Exchange) and exclusively listed
options may also trade during the GTH trading session. Further, under
Rule 5.31(h), the Exchange already has the authority to adjust any time
periods under Rule 5.31, which include the forced open timers, when it
deems necessary for a fair and orderly market. The Exchange proposes to
make this discretion clear within the proposed rule, where the Exchange
may have different timers for (i) equity and ETP options and (ii)
exclusively listed options.
Additionally, by establishing this process instead of manually
increasing the Maximum Composite Width, the Exchange believes this
provides greater transparency and clarity and better sets out
expectations for participants. The Exchange notes that it still
maintains its existing authority under Rule 5.31(h) to deviate from the
standard manner of the opening auction process. The Exchange does not
think that not having an ABBO (as none exists for exclusively listed
options) is of note, as the Exchange manually forces an open now by
increasing the Maximum Composite Width and an ABBO is not required
[[Page 24475]]
under that procedure. Of further note, the ABBO is not a requirement
for the standard opening process for any option classes, including
equity and ETP option classes. Specifically, if no away markets are
open inequity or ETP options, there would be no ABBO for that series
and thus the Composite Market for the series (and thus whether the
series would open) would be based solely on the Exchange's market for
the series. Further, if the ABBO is wider than the Exchange's market
for a series, the ABBO is also not a factor into whether the System
opened the series. In those cases, whether an equity or ETF option
series satisfied the Maximum Composite Width check would be based
solely on the Exchange's market.
Further, as previously discussed, the Exchange believes it furthers
its goal of conducting fair and orderly markets by forcing its
exclusively listed options to open if there is no Composite Market. In
the event there is no Composite Market from there being no on-screen
two-sided market from Market Maker bids and offers, and there are no
non-M Capacity orders that are crossed, the Exchange believes it is in
the benefit of the market to move forward with opening, so customers
may commence trading. As described above, there may be liquidity on the
floor from Market Makers and the Exchange understands from market
participants they would rather commence trading to manage their
positions even if there are wide, or no, Market-Maker quotes on the
book.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because all Users may trade in
any exclusively listed option series that opens subject to the proposed
forced opening process. The proposed forced opening process for
exclusively listed option series is also substantially similar to the
current forced opening process for equity and ETP option series, with
the exception that, (i) there is no ABBO for exclusively listed option
series, and thus, is not a step in the forced opening process for the
exclusively listed option series and (ii) a Composite Market is not
required for exclusively options, as described above. Additionally, all
Users will have the opportunity to instruct the System to cancel its
market orders or all open orders in the event of a forced or otherwise
manual opening. Cancellation of some or all of a User's orders in the
event of such an opening would be voluntary and completely within the
User's discretion.
The Exchange does not believe that the proposed rule change will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change updates the opening process for exclusively listed
options that may trade only on the Exchange. As discussed above, the
proposed rule change will allow participants to begin trading, hedging
exposure, and exiting positions in exclusively listed options in a
timely manner, consistent with the timing and process the Exchange
currently uses for equity and ETP options. The proposed flexibility for
Users to instruct the System how to handle their orders in the event of
a forced or manual opening applies only to how a User's orders on the
Exchange will be handled in such a circumstance.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \28\ and
Rule 19b-4(f)(6) \29\ thereunder.\30\
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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 17 CFR 240.19b-4(f)(6).
\30\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-CBOE-2025-038 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CBOE-2025-038. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number
[[Page 24476]]
SR-CBOE-2025-038 and should be submitted on or before July 1, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Stephanie Fouse,
Assistant Secretary.
[FR Doc. 2025-10444 Filed 6-9-25; 8:45 am]
BILLING CODE 8011-01-P