[Federal Register Volume 90, Number 243 (Monday, December 22, 2025)]
[Notices]
[Pages 59899-59903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-23518]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104417; File No. SR-CBOE-2025-086]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt a
New Methodology for Assessment and Collection of the Options Regulatory
Fee (ORF)
December 17, 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 December 12, 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,
II, and III 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 Fees Schedule relating to the Options Regulatory Fee
(``ORF'') to adopt a new methodology for assessment and collection of
ORF for transactions that occur on the Exchange (``On-Exchange ORF'').
The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (https://www.sec.gov/rules/sro.shtml), the
Exchange's website (https://www.cboe.com/us/options/regulation/rule_filings/bzx/), 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.
[[Page 59900]]
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 its current methodology for
assessment and collection of a regulatory fee to assess On-Exchange ORF
only for options transactions that occur on the Exchange that would
clear in the customer \3\ range at The Options Clearing Corporation
(``OCC''). The Exchange would no longer assess a regulatory fee for
options transactions that occur on other exchanges. This proposal only
proposes to amend the method of assessment and collection of the fee. A
future rule filing would be filed to set the applicable On-Exchange ORF
rate. If the On-Exchange ORF model were to go into effect today, the
current ORF rate would increase from $0.0023 per contract to an
estimated On-Exchange ORF rate of $0.01331 per contract based on 2026
estimates of regulatory revenue, regulatory costs, and customer volume.
The following provides more detail regarding the proposal.\4\
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\3\ Currently, the ORF is assessed by Cboe Options and collected
via OCC on executions for the account of Public Customers, including
Professionals, and Broker-Dealers including Foreign Broker-Dealers.
These market participants clear in the ``C'' range at OCC. ORF will
continue to be assessed to executions for the account of these
market participants under the proposed methodology. On the Exchange,
a ``Public Customer'' means a person that is not a broker or dealer
in securities and includes both Priority Customers and
Professionals. A ``Priority Customer'' means a person or entity that
is a Public Customer and is not a Professional. A ``Professional''
is any person or entity that (a) is not a broker or dealer in
securities, and (b) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s). Executions for the account of an OCC clearing member
firm proprietary account, joint back office account clearing in the
Firm range, or account of a market maker clearing in the Market
Maker range are not charged an ORF, nor would they be charged an ORF
under the current proposal.
\4\ Pursuant to a separately filed rule change, the current ORF
rate of $0.0023 will sunset the earlier of June 30, 2026 and revert
to $0.0017 as of July 1, 2026.
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Background
Today, ORF is assessed by Cboe Options to each Clearing Trading
Permit Holder (``CTPH'') for options transactions that are cleared by
the CTPH at OCC in the Customer range, regardless of the exchange on
which the transaction occurs.\5\ In other words, the Exchange imposes
the ORF on all Customer-range transactions cleared by a CTPH, even if
the transactions do not take place on the Exchange. The ORF is
collected by OCC on behalf of the Exchange from the CTPH or non-Trading
Permit Holder (``TPH'') OCC Clearing Member that ultimately clears the
transaction as further described below. With respect to linkage
transactions, Cboe Options reimburses its routing broker providing
Routing Services pursuant to Cboe Options Rule 5.36 for options
regulatory fees it incurs in connection with the Routing Services it
provides. The current Cboe Options ORF is $0.0023 per contract side.
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\5\ The Exchange notes ORF also applies to Customer-range
transactions executed during Global Trading Hours.
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The following scenarios reflect how the ORF is currently assessed
and collected (these apply regardless of whether the transaction is
executed on the Exchange or on an away exchange):
1. If a TPH is the executing clearing firm on a transaction
(``Executing Clearing Firm''), the ORF is assessed to and collected
from that TPH by OCC on behalf of the Exchange.
2. If a TPH is the Executing Clearing Firm and the transaction is
``given up'' to a different TPH that clears the transaction (``Clearing
Give-Up''), the ORF is assessed to the Executing Clearing Firm (the ORF
is the obligation of the Executing Clearing Firm). The ORF is collected
from the Clearing Give-Up.
3. If the Executing Clearing Firm is a non-TPH and the Clearing
Give-up is a TPH, the ORF is assessed to and collected from the
Clearing Give-up.
4. If a TPH is the Executing Clearing Firm and a non-TPH is the
Clearing Give-up, the ORF is assessed to the Executing Clearing Firm.
The ORF is the obligation of the Executing Clearing Firm but is
collected from the non-TPH Clearing Give-up (for the reasons described
below).
5. No ORF is assessed if a TPH is neither the Executing Clearing
Firm nor the Clearing Give-up.
The Exchange uses an OCC cleared trades file to determine the
Executing Clearing Firm and the Clearing Give-up.\6\
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\6\ The Exchange notes that in the case where a non-self
clearing TPH executes a transaction on the Exchange, the TPH's
guaranteeing CTPH is reflected as the Executing Clearing Firm in the
OCC cleared trades file and the ORF is assessed to and collected
from the Executing Clearing Firm.
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In each of scenarios 1 through 4 above, if the transaction is
transferred pursuant to a Clearing Member Trade Assignment (``CMTA'')
agreement to another clearing firm who ultimately clears the
transaction, the ORF is collected from the clearing firm that
ultimately clears the transaction (which firm may be a non-TPH) by OCC
on behalf of the Exchange. Using CMTA transfer information provided by
the OCC, the Exchange subtracts the ORF charge from the monthly ORF
bill of the clearing firm that transfers the position and adds the
charge to the monthly ORF bill of the clearing firm that receives the
CMTA transfer (i.e., the ultimate clearing firm).\7\ This process is
performed at the end of each month on each transfer in the OCC CMTA
transfer file for that month.\8\
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\7\ See Securities Exchange Act Release No. 82164 (November 28,
2017), 82 FR 57313 (December 4, 2017) (SR-CBOE-2017-074).
\8\ The Exchange notes that OCC provides the Exchange and other
exchanges with information to assist in excluding CMTA transfers
done to correct bona fide errors from the ORF calculation.
Specifically, if a clearing firm gives up or CMTA transfers a
position to the wrong clearing firm, the firm that caused the error
will send an offsetting CMTA transfer to that firm and send a new
CMTA transfer to the correct firm. The offsetting CMTA transfer is
marked with a CMTA Transfer ORF Indicator which results in the
original erroneous transfer being excluded from the ORF calculation.
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ORF is collected by OCC on behalf of the Exchange from the CTPH or
non-TPH OCC Clearing Member that ultimately clears the transaction.
While the ORF is an obligation of the Executing Clearing Firm, the ORF
is collected from the clearing firm that ultimately clears the eligible
trade, even if such firm is not a TPH. The Exchange and OCC adopted
this collection method in response to industry feedback that it would
allow TPHs and non-TPHs to more easily pass-through the ORF to their
customers. In its original ORF filing,\9\ the Exchange stated that it
expected TPHs to pass-through the ORF to their customers in the same
manner that firms pass-through to their customers the fees charged by
self-regulatory organizations (``SROs'') to help the SROs meet their
obligations under Section 31 of the Exchange Act (and the Exchange
understands this to be the case currently). Accordingly, in scenario 4
above, the ORF is collected from the non-TPH OCC Clearing Member that
clears the transaction in order to facilitate the pass-through of the
ORF to the end-customer. Likewise, collection of the ORF from the
ultimate (CMTA) clearing firm facilitates the passing the fee through
to the end-customer. In those cases where the ORF is collected from a
non-TPH OCC Clearing Member, the Exchange (through OCC) collects the
ORF as a convenience for the CTPH whose obligation it is to pay the fee
to the Exchange.
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\9\ See Securities Exchange Act Release No. 58817 (October 20,
2008), 73 FR 63744 (October 27, 2008) (SR-CBOE-2008-105).
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ORF Revenue and Monitoring of ORF
Today, revenue generated from ORF, when combined with all of the
Exchange's other regulatory fees and
[[Page 59901]]
fines, is designed to recover a material portion of the regulatory
costs to the Exchange of the supervision and regulation of TPH customer
options business including performing routine surveillances,
investigations, examinations, financial monitoring, and policy,
rulemaking, interpretive, and enforcement activities. Regulatory costs
include direct regulatory expenses and certain indirect expenses for
work allocated in support of the regulatory function. The direct
expenses include in-house and third-party service provider costs to
support the day-to-day regulatory work such as surveillances,
investigations and examinations. The indirect expenses include support
to the regulatory function from such areas as human resources, legal,
compliance, information technology, facilities and accounting. Today,
these indirect expenses are estimated to be approximately 42% of the
Exchange's total regulatory costs for 2026. Thus, direct expenses are
estimated to be approximately 58% of total regulatory costs for 2026.
In addition, based on the Exchange's analysis of its regulatory work
associated with options regulation, and considering other regulatory
revenue, it is the Exchange's practice that revenue generated from ORF
not exceed more than 75% of total annual regulatory costs.\10\
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\10\ These expectations are estimated and may be subject to
change. Currently, under the current rate temporarily increased
rate, Cboe Options forecasts for 2026 to collect closer
approximately 70% of total regulatory costs from ORF.
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Proposal for On-Exchange ORF
Cboe Options appreciates the evolving changes in the market and
regulatory environment and has been evaluating its current
methodologies and practices for the assessment and collection of ORF
while considering industry and Commission feedback. As a result of this
review, the Exchange is proposing the On-Exchange ORF, which assesses a
regulatory fee to only Exchange transactions that would clear in the
Customer range at OCC (as is the case today).\11\ The following
scenarios reflect how the On-Exchange ORF will be assessed and
collected:
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\11\ See supra note 2.
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1. If a TPH is the Executing Clearing Firm on a transaction that
occurred on the Exchange, the fee would be assessed to and collected
from that CTPH by OCC on behalf of the Exchange.
2. If a TPH is the Executing Clearing Firm and the transaction is
``given up'' to a Clearing Give-Up, the On-Exchange ORF is assessed to
the Executing Clearing Firm (the On-Exchange ORF remains the obligation
of the Executing Clearing Firm under the proposal), but the On-Exchange
ORF will be collected from the Clearing Give-Up.
The Exchange expects to provide CTPHs sufficient information in
connection with their invoice in order to reconcile charges associated
with ORF. In addition, the proposed method for collecting On-Exchange
ORF will only consider CMTAs reported to the Exchange and not those
reported directly to OCC. As described above, today's ORF is the
responsibility of the Executing Clearing Firm and collected from the
CMTA (which may be a non-TPH) as an administrative convenience. The
Exchange understands that a CMTA may be added at order entry, via post-
trade edit on the Exchange, or post-trade at OCC. CMTA transfers that
occur at OCC do not necessarily contain reliable information regarding
the Exchange on which the original transaction occurred.\12\ Without
specific information as to where the original transaction occurred, the
Exchange would not be able to accurately account for CMTA transfers
that occur at OCC. Therefore, the Exchange will only account for CMTAs
that occur on the Exchange (which may be a non-TPH) and exclude CMTAs
occurring at OCC.\13\
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\12\ Under the current methodology for assessing ORF, the
Exchange on which the transaction occurred is irrelevant.
\13\ The Exchange originally planned to exclude all CMTAs
whether reported to the Exchange or directly to the OCC. If CMTAs
are excluded, the Exchange would only collect ORF from its TPHs and
ORF would no longer be collected from non-TPHs. The Exchange
continues to believe that a new ORF model should be assessed to TPHs
only, but also understands the desire for a uniform approach to the
assessment and collection of ORF across all options exchanges. As of
filing 6 exchanges have also filed to assess and collect ORF to
transactions occurring on their respective exchanges (see Securities
Exchange Act Releases No. 103103 (May 22, 2025), 90 FR 22797 (May
29, 2025) (SR-MRX-2025-11) as amended by No. 103618 (August 1,
2025), 90 FR 37910 (August 6, 2025) (SR-MRX-2025-15); No. 103558
(July 28, 2025), 90 FR 36080 (July 31, 2025) (SR-ISE-2025-20); No.
103559 (July 28, 2025), 90 FR 36074 (July 31, 2025) (SR-BX-2025-
012); No. 103617 (August 1, 2025), 90 FR 37912 (August 6, 2025)(SR-
GEMX-2025-17); No. 103619 (August 1, 2025), 90 FR 37931 (August 6,
2025) (SR-NASDAQ-2025-054); No. 103620 (August 1, 2025), 90 FR 37918
(August 8, 2025) (SR-Phlx-2025-30)). As proposed, these filings also
will consider CMTAs reported to the respective exchange and not
CMTAs reported directly to OCC.
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With this proposal, the Exchange intends to collect ORF under its
current methodology for assessment and collection of ORF until at least
June 30, 2026. The Exchange is prepared to implement On-Exchange ORF
effective July 1, 2026 if by April 1, 2026 all U.S. options exchanges
charging an ORF have filed to modify their current methodologies of
assessment of the fee to limit the fee to transactions occurring on
their respective exchange.\14\ However, if all other options exchanges
have not filed to adopt a similar methodology by April 1, the Exchange
will delay implementation commensurate with the additional time
required for other options exchanges to adopt a similar method for
collection and assessment of ORF. The Exchange will at that time file a
separate rule filing with the amount of the On-Exchange ORF in advance
of assessing and collecting the fee under the proposed method. The
Exchange will provide at least 30 days' notice of the applicable On-
Exchange ORF rate. The Exchange believes a fee to recover a material
portion of costs for regulatory programs associated with TPH customer
business is reasonable; however, the Exchange would consider
alternative approaches for assessment and collection of the fee in
order to achieve consistency across the industry.
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\14\ The Exchange estimates it will take approximately three
months to implement the system changes associated with On-Exchange
ORF.
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To demonstrate the impact of the proposed change, the Exchange
estimates that, if the On-Exchange ORF went into effect today, the
current ORF of $0.0023 per contract side would increase to $0.01331 per
contract side using 2026 estimates for regulatory revenue, regulatory
costs and customer volume.\15\ As is the case today, revenue generated
from On-Exchange ORF, when combined with all of the Exchange's other
regulatory fees and fines, is designed to recover a material portion of
the regulatory costs to the Exchange of the supervision and regulation
of TPH customer options business, including performing routine
surveillances, investigations, examinations, financial monitoring, and
policy, rulemaking, interpretive, and enforcement activities. As
discussed above, regulatory costs include direct regulatory expenses
\16\ and certain indirect expenses in support of the regulatory
function.\17\ Indirect expenses are estimated to be approximately 42%
of the Exchange's total regulatory costs for 2026. Thus, direct
expenses are
[[Page 59902]]
estimated to be approximately 58% of total regulatory costs for 2026.
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\15\ Depending on the operative date for the filing, the
Exchange will submit an additional filing to specify the ORF rate
based on the then-current estimates for regulatory revenues,
regulatory costs and Customer volume.
\16\ Direct expenses include in-house and third-party service
provider costs to support the day-to-day regulatory work such as
surveillances, investigations, and examinations.
\17\ Indirect expenses include support from areas such as human
resources, legal, compliance, information technology, facilities and
accounting.
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The Exchange will continue to monitor the amount of revenue
collected from On-Exchange ORF to ensure that it, in combination with
its other regulatory fees and fines, does not exceed the Exchange's
total regulatory costs. Further, Cboe Options expects to continue its
current practice that revenue generated from On-Exchange ORF not exceed
75% of total annual regulatory costs. And as is the Exchange's practice
today, revenue generated by On-Exchange ORF will not be used for non-
regulatory purposes.
The Exchange will continue to monitor its regulatory costs and
revenues at a minimum on a semi-annual basis. If the Exchange
determines regulatory revenues exceed or are insufficient to cover a
material portion of its regulatory costs in a given year, the Exchange
will adjust the On-Exchange ORF by submitting a fee change filing to
the Commission. The Exchange will notify TPHs of adjustments to the On-
Exchange ORF via an Exchange Notice in advance of any change.\18\
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\18\ See Exchange Notice, C2025022804 ``Cboe C1 Options
Exchanges Regulatory Fee Update Effective April 1, 2025.''
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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.\19\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\20\ which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its TPHs and other persons using its facilities.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \21\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(4).
\21\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed change to assess and collect an
On-Exchange ORF is reasonable, equitable and not unfairly
discriminatory for various reasons. First, On-Exchange ORF is
reasonable, equitable and not unfairly discriminatory in that it is
charged to all Exchange transactions that clear in the Customer range
at the OCC. Similar to ORF today, the Exchange believes On-Exchange ORF
ensures fairness by assessing a specific fee to those TPHs that require
more Exchange regulatory services based on the amount of customer
options business they conduct. Over recent years, options trading
volume has increased with a growing percentage of the volume applicable
to customer transactions. Customers trading on the Exchange (through a
TPH) benefit from the protections of a robust regulatory program
including the maintenance of fair and orderly markets and protections
against fraud and other manipulation. The Exchange believes it is
equitable and not unfairly discriminatory to assess a regulatory fee to
transactions that clear in the Customer range to cover regulatory
costs, but not to transactions clearing in the Firm or Market Maker
range because CTPHs and Market Maker TPHs (who clear in the Firm and
Market Maker range), as those market participants are generally subject
to other Exchange fees, fines and obligations. For example, CTPHs and
Market Maker TPHs are required to pay Exchange application fees, permit
fees, and connectivity fees, amongst others. In addition, all fines
issued by the Exchange for regulatory infractions are assessed only to
TPHs and would be applied to regulatory revenues. As with today's ORF,
the Exchange expects that CTPHs from whom On-Exchange ORF is collected
will pass through the fee to their customers (as the Exchange
understands occurs today). In addition, Market Makers in particular are
subject to various quoting and other obligations to ensure that they
provide stable and liquid markets, which benefit all market
participants including customers. Excluding Market Maker transactions
from On-Exchange ORF will allow Market Makers to better manage their
costs more effectively thus enabling them to better allocate resources
toward technology, risk management, and capacity to ensure continued
liquidity provision.
In addition to the overall increase in Customer-range volume
generally, regulating customer trading activity is more labor intensive
and requires greater expenditure of human and technical resources than
regulating non-customer trading activity, which tends to be more
automated and less labor-intensive. For example, there are costs
associated with main office and branch office examinations (e.g., staff
and travel expenses), as well as investigations into customer
complaints and terminations of Registered Persons. As a result, the
costs associated with administering the customer component of the
Exchange's overall regulatory program are materially higher than the
costs associated with administering the non-customer component (e.g.,
CTPH proprietary transactions) of its regulatory program.\22\ While the
Exchange notes that it has broad regulatory responsibilities with
respect to its TPHs' activities, irrespective of where their
transactions take place, the Exchange believes it is reasonable to
assess the proposed fee to only those transactions occurring on the
Exchange. The proposed change more narrowly tailors the fee to products
and transactions with a direct connection to the Exchange. Today, a
customer transaction may be assessed an ORF from every options exchange
totaling as much as $0.0187 per transaction per side.\23\ While the
Exchange's proposed ORF rate under the proposed model of $0.01331 is
higher than its current ORF rate of $0.0023 under the current model, if
all exchanges adopted a similar on-exchange model, ORF rates may
decrease for individual transactions overall because the proposed On-
Exchange ORF will avoid overlapping ORFs that would otherwise be
assessed by Cboe Options and other options exchanges that also assess
an ORF. With this proposal, transactions that would clear in the
Customer range occurring on other exchanges would no longer be subject
to an ORF assessed by Cboe Options.
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\22\ If the Exchange changes its method of funding regulation or
if circumstances otherwise change in the future, the Exchange may
decide to modify On-Exchange ORF or assess a separate regulatory fee
on TPH proprietary transactions if the Exchange deems it advisable.
\23\ As of October 1, 2025.
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The Exchange believes it is equitable and not unduly discriminatory
to modify the method of collecting the fee such that On-Exchange ORF
will not consider CMTAs reported directly to OCC as is done in today's
method of ORF. CMTA transfers are considered today under the current
collection methodology for ORF as a convenience to industry members in
administering a pass through of the fee to their customers. Limiting
the On-Exchange ORF to transactions on the Exchange poses a limitation
in the use of CMTA for this purpose. The Exchange understands that a
CMTA may be added at order entry, via post-trade edit on the Exchange,
or post-trade at OCC. CMTA transfers that occur at OCC do not
necessarily contain reliable information regarding the Exchange on
which the original transaction occurred.\24\ Without specific
information as to where the
[[Page 59903]]
original transaction occurred, the Exchange would not be able to
accurately account for CMTA transfers that occur at OCC.
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\24\ Under the current methodology for assessing ORF, the
Exchange on which the transaction occurred is irrelevant.
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The Exchange also believes that the fact that a Consolidated Audit
Trail (``CAT'') fee is in place should not preclude the Exchange from
assessing On-Exchange ORF. The CAT is a repository of order, trade and
customer information that is used as the basis for an audit trail of
such activities. Like industry members, the exchanges, including Cboe
Options, also pays a CAT fee to support the operation and maintenance
of CAT (in other words, it does not support regulatory work undertaken
by exchanges). Cboe Options does not include fees it pays for CAT in
the regulatory expenses it looks to offset under ORF. Yes, the Exchange
uses CAT data as part of its regulatory work, but only from an audit
trail perspective. On-Exchange ORF, on the other hand, offsets the
regulatory work the Exchange performs (using CAT data among other
sources) such as surveillances, investigations, examinations, etc. The
Exchange believes its fair and reasonable to assess an On-Exchange ORF
in addition to fees associated with CAT.
The Exchange further believes that the proposed change to the
method for assessment and collection of the fee is reasonable because
it would help ensure that revenue collected from the On-Exchange ORF,
in combination with other regulatory fees and fines, would help offset,
but not exceed, the Exchange's total regulatory costs. As discussed,
On-Exchange ORF is similarly designed to the current ORF, in that
revenues generated from the fee would be less than or equal to 75% of
the Exchange's regulatory costs, which is consistent with the practice
across the options industry today and the view of the Commission that
regulatory fees be used for regulatory purposes and not to support the
Exchange's business side.
As noted above, the Exchange will also continue to monitor on at
least a semi-annual basis the amount of revenue collected from the On-
Exchange ORF, even as amended, to ensure that it, in combination with
its other regulatory fees and fines, does not exceed the Exchange's
total regulatory costs. If the Exchange determines regulatory revenues
would exceed its regulatory costs in a given year, the Exchange will
reduce the On-Exchange ORF by submitting a fee change filing to the
Commission.\25\
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\25\ Consistent with Rule 2.2 (Regulatory Revenue), the Exchange
notes that should excess ORF revenue be collected prior to any
reduction in an ORF rate, such excess revenue will not be used for
nonregulatory purposes.
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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 not necessary or appropriate in
furtherance of the purposes of the Act. This proposal does not create
an unnecessary or inappropriate intra-market burden on competition
because On-Exchange ORF applies to all customer activity on the
Exchange, thereby raising regulatory revenue to offset regulatory
expenses. It also supplements the regulatory revenue derived from non-
customer activity. The Exchange notes, however, the proposed change is
not designed to address any competitive issues. Indeed, this proposal
does not create an unnecessary or inappropriate inter-market burden on
competition because it is a regulatory fee that supports regulation in
furtherance of the purposes of the Act. The Exchange is obligated to
ensure that the amount of regulatory revenue collected from the On-
Exchange ORF, in combination with its other regulatory fees and fines,
does not exceed regulatory costs. In addition, the Exchange will not
implement the On-Exchange ORF until all other options exchanges are
prepared to adopt a similar model to avoid overlapping ORFs.
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 written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \26\ and paragraph (f) of Rule 19b-4 \27\
thereunder. 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.
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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 17 CFR 240.19b-4(f).
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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-2025-086 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-2025-086. 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 filing 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 SR-CBOE-2025-086 and should be submitted on
or before January 12, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23518 Filed 12-19-25; 8:45 am]
BILLING CODE 8011-01-P