    [Federal Register Volume 91, Number 58 (Thursday, March 26, 2026)]
    [Notices]
    [Pages 14736-14742]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 2026-05845]

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    SECURITIES AND EXCHANGE COMMISSION

    [Release No. 34-105064; File No. SR-CBOE-2026-024]

    Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
    Filing of Proposed Rule Change To Amend Certain of Its Rules Regarding
    Complex Orders and Complex Order Auctions To Accommodate Stop-Limit
    Complex Orders and Establish Stop Complex Order Auctions (``SCOA'') as
    a New Type of Auction Mechanism

    March 23, 2026.
        Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
    (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
    on March 9, 2026, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
    Options'') filed with the Securities and Exchange Commission (``SEC''
    or ``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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    [[Page 14737]]

    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 certain of its rules regarding complex orders and complex
    order auctions to accommodate stop-limit complex orders and establish
    Stop Complex Order Auctions (``SCOA'') as a new type of auction
    mechanism. 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.

    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 certain Exchange rules regarding
    complex orders and complex order auctions to establish stop-limit
    complex orders as a type of complex order and SCOA as a type of auction
    mechanism that will facilitate auctions for stop-limit complex orders.
    Specifically, the Exchange proposes to amend Rule 5.33 to (1) define
    stop-limit complex orders and SCOA, as well as additional terms needed
    to support stop-limit complex orders and SCOA, (2) describe SCOA
    processing as a new type of auction for complex orders, and (3) broaden
    the existing naming convention for auction communications to include
    SCOA while also updating certain auction references throughout to
    include SCOA. Additionally, the Exchange proposed to amend Rule
    5.21(b), Rule 5.25(c), and Rule 5.34(c) to include SCOA in certain
    references with other types of auctions, thereby applying certain
    existing safeguards to SCOA. The Exchange also proposes an
    administrative change to Rule 5.33(b) to make a grammatical correction.
        A ``complex order'' is an order or quote involving the concurrent
    execution of two or more different series in the same underlying equity
    security or index (the ``legs'' or ``components'' of the complex
    order), for the same account, occurring at or near the same time and
    for the purpose of executing a particular investment strategy with no
    more than the applicable number of legs.\3\ A ``Stop-Limit'' order is
    an order to buy (sell) that becomes a limit order \4\ when the
    consolidated last sale price (excluding prices from complex order
    trades if outside the NBBO) or NBB (NBO) for a particular option
    contract is equal to or above (below) the specified stop price.\5\
    Currently, the Exchange offers stop-limit functionality for simple
    orders only. The Exchange proposes to extend this functionality to
    complex orders, thereby creating stop-limit complex orders for options.
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        \3\ See Rule 1.1.
        \4\ See Rule 1.1, which states that a ``limit order'' is an
    order to buy or sell a stated number of option contracts at a
    specified price or better.
        \5\ See Rule 5.6(c).
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        Taking into consideration the growth of daily expiring options, the
    Exchange believes that market participants will use stop-limit complex
    orders to more efficiently manage the short side of a complex order.
    The Exchange understands market participants currently may enter a
    stop-limit order on the short leg of a complex order while managing the
    long leg separately. A stop-limit complex order will provide market
    participants with the ability to manage both the long and short legs
    simultaneously.
        To establish stop-limit complex orders, the Exchange proposes to
    add ``stop-limit complex order'' in Rule 5.33(b) as a new instruction
    type that the System \6\ will accept as a complex order and ``Market-
    Maker SBBO'' as a new term in Rule 5.33(a). As a new type of complex
    order, a stop-limit complex order means a complex order to buy or sell,
    as the case may be, two or more different series in the same underlying
    equity security or index, which are the ``legs'' or ``components'' of
    the complex order, for the same account, occurring at or near the same
    time and for the purpose of executing a particular investment strategy
    with no more than the applicable number of legs. Stop-limit complex
    orders will become limit orders when certain trigger conditions are
    met, one of which involves Market-Maker quotes in the individual legs
    of a complex order. Therefore, the Exchange proposes to adopt the new
    term ``Market-Maker SBBO'' to mean the best bid and offer on the
    Exchange calculated using only appointed Market-Maker quotes in the
    individual legs of a complex order. The Exchange believes that the use
    of the Market-Maker SBBO is preferable because it insulates stop-limit
    complex orders from inappropriate triggering events that could
    otherwise be caused by including non-Market-Maker single-leg limit
    orders into the SBBO. Specifically, using the Market-Maker SBBO will
    help avoid cascading events where a customer enters a single-leg order
    with a limit price that is higher than the current best Market-Maker
    bid. Using the SBBO inclusive of single-leg customer orders could cause
    resting complex stop limit orders to trigger on SBBOs that are not
    reflective of liquidity provider price levels, which could harm complex
    stop limit customers. Further, the execution of the first stop-limit
    complex order(s) that are inappropriately triggered by inclusion of a
    non-Market-Maker order into the SBBO may in turn trigger a second
    investor's stop limit order with a more aggressive stop price, and so
    on, thereby creating a cascading event of inappropriately-triggered
    customer stop-limit orders. The Exchange believes that limiting the
    trigger condition, as described below, to quotes from Market-Makers
    will be more reflective of the market value and provide a more
    authentic market valuation to determine if a stop-limit complex order
    should be triggered.
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        \6\ See Rule 1.1, which states that the term ``System'' means
    the Exchange's hybrid trading platform that integrates electronic
    and open outcry trading of option contracts on the Exchange, and
    includes any connectivity to the foregoing trading platform that is
    administered by or on behalf of the Exchange, such as a
    communications hub.
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        A stop-limit complex order will become a limit order when either
    (i) the Market-Maker SBBO or a trade price for a trade that occurs in
    the same complex strategy is equal to or higher (lower) than the stop-
    limit price, or (ii) the same side bid (ask) of the underlying equity
    security or the underlying index level, as the case may be, is equal to
    or higher (lower) than the designated stop-limit price or if a complex
    trade price is equal to or higher (lower) than the stop-limit price. In
    other words, a complex-stop limit order is a conditional order that
    becomes a limit order when triggered by one of two conditions. Only one
    of the two possible trigger conditions can be designated for a stop-
    limit complex order. Stop-limit complex orders may

    [[Page 14738]]

    not be designated for bulk messages or as orders Direct to PAR.\7\
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        \7\ See Rule 5.6(b), which defines a ``Direct to PAR'' order as
    an order a User designates to be routed directly to a specified PAR
    workstation for manual handling. A PAR workstation is an Exchange-
    provided order management tool for use on the Exchange's trading
    floor.
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        To facilitate order processing for stop-limit complex orders, the
    Exchange proposes to establish SCOA as a new type of auction mechanism.
    The Exchange currently offers a variety of auction mechanisms which
    provide price improvement opportunities for eligible orders but only
    one type of auction mechanism for complex orders, Complex Order Auction
    (``COA'').\8\ The Exchange proposes SCOA as a second type of auction
    mechanism for complex orders, specifically stop-limit complex orders,
    that is similar to COA. Like COA, SCOA is intended to provide
    opportunities for price improvements, but it is also designed to
    maximize execution quantity, particularly given that one event may
    trigger multiple complex stop-limit orders. SCOA is the auction
    mechanism for stop-limit complex orders, and stop-limit complex orders
    are only eligible for SCOA processing (in other words, all triggered
    stop-limit complex orders will be processed in a SCOA). Consequently,
    Rule 5.33(b)(5)(A) is amended to state that a stop-limit complex order
    is not COA-eligible.
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        \8\ See Rule 5.33.
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        To add SCOA to Rule 5.33 as a new type of auction mechanism for
    stop-limit complex orders, the Exchange proposes to add the term ``Stop
    Complex Order Auction'' or ``SCOA'' as a new definition in Rule 5.33(a)
    and detail SCOA and SCOA processing in Rule 5.33(d). Rule 5.33(d)
    currently details COA and COA processing. Since both COA and SCOA are
    auction mechanisms for complex orders, the Exchange proposes to rename
    Rule 5.33(d) from ``Complex Order Auctions (COAs)'' to ``Auction Types
    for Complex Orders'' and relocate all existing COA provisions currently
    in Rule 5.33(d) to Rule 5.33(d)(1). Additionally, SCOA will utilize the
    same system functionality for order entry and messaging as COA.
    Consequently, the existing naming convention found in Rule 5.33 for
    order entry, including transaction ID, and auction messaging that
    currently reference COA (e.g., COA messages) is broadened by replacing
    the existing ``COA'' designation with ``auction'' throughout Rule 5.33.
    For example, instances of ``COA messages'' throughout Rule 5.33 are
    replaced with ``auction messages'' so as to apply to both COA and SCOA
    messages within Rule 5.33. Also, language in existing Rule 5.33(d)(3)--
    Response Time Interval is updated to Rule 5.33(d)(1)(C)--Response Time
    Interval for COA to clarify that occurrences of Response Time Interval
    in that subparagraph are applicable to COA whereas occurrences of
    Response Time Interval in new Rule 5.33(d)(2)(D) are applicable to
    SCOA.
        The Exchange proposes to further amend Rule 5.33(d) by adding
    ``Stop Complex Order Auction (SCOAs)'' as the second action [sic] type
    of auction mechanism for complex orders, specifically (and solely) for
    stop-limit complex orders, as new subparagraph (d)(2). New Rule
    5.33(d)(2)(A) establishes that a SCOA is triggered when the trigger
    condition designated for a stop-limit complex order has been met. There
    are two possible trigger conditions for a stop-limit complex order: the
    SBBO/trade price trigger condition and the underlying price trigger
    condition. However, only one of the two possible types of trigger
    conditions may apply to a stop-limit complex, and the trigger condition
    type is determined when a stop-limit complex order is submitted by the
    User.\9\ If no trigger condition type is designated when a stop-limit
    complex order is submitted, the default trigger condition will be
    applied, as described below.
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        \9\ See Rule 1.1, which states that the term ``User'' means any
    TPH or Sponsored User who is authorized to obtain access to the
    System pursuant to Rule 5.5.
    ---------------------------------------------------------------------------

        For a stop-limit complex order with the SBBO/trade price trigger
    condition, the trigger condition is met when either (i) the same side
    Market-Maker SBBO is equal to or higher (lower) than the stop-limit
    price or (ii) a trade occurs in the same complex instrument at a price
    equal to or higher (lower) than the stop-limit price. The SBBO/trade
    price trigger condition will be the trigger condition for a SCOA if the
    SBBO/trade price trigger condition is designated as such when an order
    is submitted or if no trigger condition is designated at the time of
    order submission since the SBBO/trade price trigger condition functions
    as the default trigger condition. Stop-limit complex orders comprised
    of legs in different groups of series in a class that designate the
    SBBO/Trade Price trigger condition will only trigger a SCOA if a trade
    occurs at or better than the stop price. As an example, for stop-limit
    complex orders with both SPX and SPXW leg components that have the
    SBBO/Trade Price trigger condition, the SCOA will only trigger if a
    trade occurs at or better than the stop price.
        For a stop-limit complex order with an underlying price designated
    as the trigger condition, the order must be submitted with instructions
    that designate the price threshold of the underlying security or index
    as either (i) at or above the underlying price or index level or (ii)
    at or below the underlying price or index level. If the underlying
    security is an equity, the SCOA is triggered when the same side bid
    (ask) of the underlying security is equal to or higher (lower) than the
    designated stop-limit price or if a last-sale eligible trade price is
    equal to or higher (lower) than the stop-limit price. If the underlying
    security is an index, the SCOA is triggered when the underlying index
    level is equal to or higher (lower) than the designated threshold
    price. The price threshold must be designated at a price that is higher
    (lower) than the current value of the underlying security.
        Once the trigger condition designated for a stop-limit complex
    order is met, a SCOA will be initiated, and the System will send an
    auction message to all subscribers that receive auction messages. An
    auction message will identify the auction ID, instrument ID, quantity,
    and side of the market of the stop-limit complex order. If a single
    stop-limit complex order is triggered, the SCOA starting auction price
    will be the less aggressive of the order's limit price or the opposite
    side SBBO. In addition to addressing a single stop-limit complex order,
    SCOA is an auction mechanism designed to effectively manage order
    handling in the event that multiple stop-limit complex orders with the
    same trigger event are elected simultaneously, which has been observed
    for simple complex [sic] orders. If multiple stop-limit complex orders
    in the same complex instrument are triggered by the same trigger event,
    such orders are bundled into the same SCOA, as stated in new Rule
    5.33(d)(2)(B). For multiple stop-limit complex orders in the same SCOA
    with the same trigger event, the SCOA starting auction price will be
    the less aggressive of either the most aggressive limit price of the
    orders in the SCOA or the opposite side SBBO.
        If multiple stop-limit complex orders are received for the same
    complex strategy but with different trigger conditions, such orders
    will not be bundled into the same SCOA. Instead, multiple stop-limit
    complex orders in the same complex strategy but with different trigger
    events will be processed as separate SCOAs. SCOAs may process
    concurrently, and the System may initiate a SCOA in a complex strategy

    [[Page 14739]]

    even though another SCOA in that complex strategy is ongoing.
        Proposed Rule 5.33(b)(2)(D) defines ``Response Time Interval'' for
    SCOA as the period of time during which Users may submit responses to
    the auction message. The Exchange will establish the Response Time
    Intervals for SCOA on a class-by-class basis, and as provided in new
    Rule, the duration of the response time interval may not exceed 1000
    milliseconds. Auction Responses to SCOA will be substantially similar
    to Auction Responses to COA, and consequently, the process of
    submitting Auction Responses for SCOA in Rule 5.33(b)(2)(E) is
    substantially similar to the process of submitting Auction Responses
    for COA in Rule 5.33(b)(1)(D). As is the case for COA, the Exchange
    will determine on a class-by-class basis if all Users are eligible to
    submit Auction Response(s) or if only Marker-Makers with an appointment
    in the class and TPHs acting as agent for orders resting at the top of
    the COB \10\ in the relevant complex strategy may submit Auction
    Response(s). An Auction Response must specify the price, size, side of
    the market and auction ID for the SCOA that the Auction Response is in
    response to. Auction Response(s) with a permissible Capacity in the
    applicable minimum increment during the Response Time Interval will be
    accepted by the System. Auction Responses may be for a quantity that is
    more than the SCOA order. The System will aggregate the size of Auction
    Responses submitted at the same price for an EFID \11\ and cap the size
    of the aggregated Auction Responses at the size of the SCOA order.
    During the Response Time Interval, Auction Responses are not firm and
    can be modified or withdrawn at any time prior to the end of the
    Response Time Interval. However, any modified Auction Response will be
    given a new timestamp by the System, resulting in a loss of priority
    unless the modification was to decrease the size in the Auction
    Response. At the end of the Response Time Interval, Auction Responses
    are firm, and their price and size are guaranteed. Auction Responses
    are not displayed and may only execute against the SCOA order for which
    an Auction Response is submitted. The System will cancel or reject any
    unexecuted Auction Responses or unexecuted portions at the conclusion
    of the SCOA. In certain circumstances, the System will terminate a SCOA
    prior to end of the Response Time Interval.
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        \10\ See Rule 5.33(a), which defines ``Complex Order Book'' or
    ``COB'' as the Exchange's electronic book of complex orders used for
    all trading sessions.
        \11\ See Rule 1.1, which state that the term ``EFID'' means an
    Executing Firm ID.
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        Similar to COA,\12\ a SCOA may be terminated early if orders are
    received in a leg of the stop-limit complex order that would improve
    the SBBO on the same side as the SCOA order to a price better than the
    limit price of any of the orders in the SCOA. A SCOA may also be
    terminated early if an order is received in a leg of the stop-limit
    complex order that would join or improve the SBBO on the same side of
    the SCOA order to a price equal to the limit price of any of the orders
    in the SCOA and cause any component of the SBBO to be represented by a
    Priority Customer.\13\ In either case of early termination, the SCOA
    will be terminated by the System and any unexecuted orders resulting
    from the termination will be entered into the COB, if eligible, in
    accordance with new Rule 5.33(d)(2)(E)(iii).
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        \12\ See existing Rule 5.33(d)(3)
        \13\ See Rule 1.1 which states that the term ``Priority
    Customer'' means a person or entity that is a Public Customer and is
    not a Professional.
    ---------------------------------------------------------------------------

        Since other orders received in a leg of the complex order may
    result in early termination of a SCOA as described above, the Exchange
    recognizes it is possible that market activity may be used to interfere
    with SCOA processing in a way that is contrary to just and equitable
    principles of trade in the markets. Consequently, the Exchange proposes
    to amend Interpretations and Policies .03 to Rule 5.33 to include SCOA
    so that if the Exchange identifies a pattern or practice of order
    submissions by a TPH that results in early termination of a SCOA(s)
    because such orders cause one of the conditions for early SCOA
    termination to be met, the actions of the TPH will be deemed conduct
    inconsistent with just and equitable principles of trade and a
    violation of Rule 8.1, as is currently the case for COA.
        New Rule 5.33(d)(2)(F) establishes the processing of SCOA orders.
    Once the Response Time Interval has ended, the System will execute a
    SCOA order, in whole or in part, against complex contra-side interest
    by using an allocation algorithm that will allocate Auction Responses
    and unrelated orders resting in the COB to maximize executed volume.
    The SCOA allocation algorithm maximizes execution quantity while
    optimizing price-improvement opportunity for stop-limit complex order
    customers. The Exchange notes that SCOA does not allow legging because
    the SCOA allocation algorithm considers all available liquidity and has
    multiple rounds. The complexity is compounded if legging is included
    and is further compounded if any of the legging events trip risk
    control limits for the single-leg book participants (particularly for
    Market-Makers who rely heavily on risk controls). The Exchange notes if
    the SCOA orders aren't filled in the auction, then they will be added
    to the COB in sequence and individually eligible for legging at that
    point (as they are ultimately just complex limit orders at that point).
    If there are any unfilled order(s) in a SCOA after allocating Auction
    Responses and unrelated orders resting in the COB, the System will use
    an iteration process to attempt to fill the remaining orders of the
    initial SCOA. Upon completion of the initial SCOA, unfilled order(s)
    will iterate through additional SCOAs at incrementally more aggressive
    starting prices, as stated in the Exchange's technical specifications,
    until all orders are filled, their limit price has been reached, or the
    current opposite side SBBO price has been used as the last auction
    start price. The System enters any unexecuted portion of a SCOA order
    that does not execute at the end of the SCOA iterations into the COB,
    if eligible for entry, and applies a timestamp based on the time it
    enters the COB. The System cancels or rejects any unexecuted portion of
    a SCOA order that does not execute at the end of the SCOA iterations if
    not eligible for entry into the COB, in accordance with the
    instructions for the stop-limit complex order.
        The Exchange proposes additional amendments to Rule 5.33 to apply
    certain existing provisions of the rule to SCOA or add SCOA as an
    auction mechanism applicable to existing rule provisions. Specifically,
    the definition of ``Regular Trading'' in Rule 5.33(a) is amended to add
    SCOA to the existing COA reference, thereby excluding complex orders
    processed through COA or SCOA from the definition of regular trading
    since complex orders processed during the COA or SCOA process are not
    part of regular trading of complex orders. The Exchange also proposes
    to amend Rule 5.33(b) to add SCOA to references of COA since SCOA is
    treated in the same manner as COA regarding the Exchange's
    determination of terms and Capacities.\14\ The instruction type of
    Stock-Option Order as provided in Rule 5.33(b)(5) is amended to state
    that, like COA and other auction mechanisms, a nonconforming stock-
    option order is not eligible for SCOA

    [[Page 14740]]

    processing. SCOA is added to COA references in Rule 5.33(k) so that a
    SCOA will end if any component or underlying security of a SCOA order
    is halted.
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        \14\ See Rule 1.1 which states that ``Capacity'' means the
    capacity in which a User submits an order, such as an order for the
    account of a Market-Maker or Public Customer.
    ---------------------------------------------------------------------------

        The Exchange also proposes to add SCOA to Rules 5.21, 5.25, and
    5.34 to include SCOA with COA references regarding order handling,
    message traffic mitigation, and protection mechanisms and risk controls
    for complex orders. Specifically, the Exchange proposes to amend Rule
    5.21(b)(3) to remove language limiting response auctions for complex
    orders and add SCOA to electronic order handling during a limit up-
    limit down state. The proposed amendment to Rule 5.25(c) adds SCOA to
    the list of the Exchange's auction mechanisms, thereby applying the
    message traffic mitigation requirements for auction response processing
    to SCOA. The Exchange also proposes to amend Rule 5.34(b) and (c) to
    include SCOA with existing references to COA to extend existing order
    and quote price protection mechanisms and risk controls for complex
    order to SCOA communications and processing. Under proposed
    5.34(c)(4)(B)(i), a User may specify whether volume or executions in
    SCOA, in addition to existing auction mechanisms named in the rule,
    will count toward the User's class, EFID, or EFID Group limit. Option
    volume resulting from SCOA processing may be excluded from certain risk
    monitor mechanism risk parameters, namely the volume parameter in Rule
    5.34(c)(4)(A)(i) and the count parameter in Rule 5.34(c)(4)(A)(iii).
    Additionally, under proposed rule 5.34(c)(4)(F), SCOA is named as a
    type of complex order within the rule so that individual trades
    executed as part of a complex order response may be counted when
    determining that the volume, notional, count, or risk trips limit as
    well as percentage limit have been reached. Use of this functionality
    is optional, and a User may continue to include executions resulting
    from these exchange auctions in their risk parameters.
        The Exchange also proposes to make a grammatical correction to Rule
    5.33(d)(1)(D) to update ``appointed'' to ``appointment'' when
    referencing the appointment of a Market-Maker.
    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.\15\ Specifically, the
    Exchange believes the proposed rule change is consistent with the
    Section 6(b)(5) \16\ 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) \17\ requirement that the rules of an exchange not be
    designed to permit unfair discrimination between customers, issuers,
    brokers, or dealers.
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        \15\ 15 U.S.C. 78f(b).
        \16\ 15 U.S.C. 78f(b)(5).
        \17\ Id.
    ---------------------------------------------------------------------------

        In particular, the Exchange believes the proposed change would
    remove impediments to and perfect the mechanism of a free and open
    market and a national market system, and protect investors and the
    public interest by making available to investors a type of complex
    order that incorporates the functionality of a stop-limit order. A
    stop-limit complex order can effectively be used by a market
    participant to replace manual monitoring and management a market
    participant must currently engage in to gain the benefits of stop-limit
    functionality. Market participants may choose to execute a transaction
    once certain market conditions are met as a way to help manage and
    reduce the risk of extreme loss. Stop-limit complex orders provide
    investors an execution and risk management tool to execute transactions
    without the manual monitoring needed today. The addition of a stop-
    limit complex order gives market participants who wish to utilize this
    order type an automated way of monitoring for conditions in which they
    desire an execution to occur, thereby creating operational efficiencies
    for the market. The Exchange believes the proposed rules are
    appropriate in that complex orders are recognized by market
    participants as useful, both as an investment and a risk management
    strategy, and adding stop-limit order functionality to complex orders
    provides even greater utility. The proposed rules will provide an
    efficient mechanism for carrying out investor strategies.
        The Exchange also believes auctioning triggered stop-limit complex
    orders through a SCOA will provide those orders with additional
    opportunities for price improvement and executions, particularly given
    that multiple stop-limit complex orders may be triggered by the same
    event. SCOA is necessary as a new auction mechanism to accommodate
    stop-limit complex order auctions because SCOA functionality that
    bundles multiple orders is unique to the SCOA auction mechanism. The
    Exchange believes that when multiple stop-limit complex orders are
    triggered by the same event, bundling into a single SCOA will have
    better execution outcomes than processing multiple individual orders in
    separate auctions. Pursuant to the proposed trigger process, the System
    will initiate the SCOA process for all stop-limit complex orders once
    designated conditions are met. Through the SCOA process, the Exchange
    intends to allocate resting interest against auctioned stop-limit
    orders to maximize executed volume, thereby filling stop-limit complex
    orders to the extent possible based on the auction responses received
    for the SCOA and resting interest in the COB. The Exchange believes
    this allocation method will benefit investors because it will result in
    execution of as many contracts of the auctioned order(s) as possible.
    The Exchange believes that the proposal to initiate a SCOA once the
    designated trigger condition for a stop-limit complex order has been
    met removes impediments to, and perfects the mechanisms of, a free and
    open market and a national market system and, in general, protects
    investors and the public interest because the Exchange will initiate a
    SCOA for a stop-limit complex order in accordance with the user's
    instructions. Additionally, through the SCOA functionality that bundles
    multiple stop-limit complex orders with the same trigger condition into
    the same SCOA, SCOA processing will pursue price improvement through
    its allocation algorithm that is designed to maximize execution
    quantity while optimizing price-improvement opportunity for customers.
    The proposed execution of SCOA orders following the conclusion of a
    SCOA is consistent with general principles of customer priority and
    protects the leg markets. While SCOA orders may execute against complex
    contra-side interest only, the prices of these executions must improve
    the SBBO if there is a Priority Customer representing any leg on the
    Simple Book as required by Rule 5.33(f)(2)(A)(iv). The proposed

    [[Page 14741]]

    stop-limit complex order rules also promote equal access by providing
    recipients of the Exchange's data feeds that include auction
    notifications with the opportunity to interact with orders in a SCOA.
        The Exchange again notes that the communication functionality for
    SCOA is the same as the existing functionality for COA, providing Users
    with the ability to place a stop-limit complex order if they so choose.
    When utilizing a stop-limit complex order, Users also have the choice
    to select the trigger condition for the order. Market participants who
    wish to place a stop-limit complex order have the flexibility to choose
    one of two types of trigger conditions which, if met, would execute the
    stop-limit complex order for SCOA processing. The trigger conditions
    rely on certain option or underlying prices, or index levels. The
    Exchange believes it is appropriate to use the Market-Maker SBBO for
    one of the trigger conditions because it will help insulate a stop-
    limit complex order from being triggered by an inappropriate trigger
    event (such as one or more customer orders placed at an extreme price)
    that could otherwise be caused by including non-Market-Maker limit
    orders into the SBBO. Use of the Market-Maker SBBO as a triggering
    condition is intended to help avoid cascading triggering events that
    could result from customer stop-limit complex orders with limit prices
    that are not necessarily reflective of market valuation. Use of the
    Market-maker SBBO will help support greater market stability and
    execution and provides certain protections to market participants who
    wish to utilize stop-limit complex orders. The Exchange believes the
    proposed changes to add stop-limit complex orders and SCOA are not
    unfairly discriminatory, as the abilities to place a stop-limit order
    and respond to a SCOA auction message are generally available to all
    Users. The proposed rule change provides the Exchange with the
    authority to determine if all Users or only Market-Makers and certain
    TPHs may respond to auction messages in alignment with Exchange
    authority for responses to auction messages for COA,\18\ and the
    Exchange believes is appropriate to limit responses to Market-Makers
    and certain TPHs if it is necessary to incentivize those Market-Makers
    or TPHs to provide liquidity and further encourage competition. If the
    Exchange were to limit responses to only Market-Makers and designated
    TPHs, the Exchange would do so to encourage more competitive responses
    because such responses will have a greater likelihood of fulfillment in
    larger quantities when such responses are at more competitive prices.
    ---------------------------------------------------------------------------

        \18\ See Rule 5.33(d)(1)(D).
    ---------------------------------------------------------------------------

        Additionally, regarding risk controls and price protection
    mechanisms, the Exchange believes the proposed change would remove
    impediments to and perfect the mechanism of a free and open market and
    a national market system, and protect investors and the public interest
    by providing market participants with enhanced abilities to manage
    their risk with respect to stop-limit complex orders on the Exchange.
    The Exchange believes that the proposed rule change will protect
    investors and the public interest because the proposed extension of
    reasonability checks and the inclusion of SCOA processing with drill-
    through protection as a risk monitoring mechanism will assist Users in
    minimizing their risk exposure, thereby reducing the potential for
    disruptive, market-wide events. The Exchange also notes that the
    proposed amendment to Rule 5.33(k) to cancel or reject all auction
    responses to a SCOA in the event that any component or underlying
    security to a stop-limit complex order is halted provides an addition
    layer of protection to market participants by eliminating SCOA
    processing when trading in underlying securities is not available. SCOA
    will function in a similar manner as COA with respect to these
    protection and risk mechanisms, as well as trading halts, and the
    proposed amendments are consistent with Cboe Rules as applicable to
    COA.
        Proposed amendments to Rules 5.34(b) and (c) specifically include
    SCOA with safeguards that exist for COA. The Exchange believes the
    proposed change to include SCOA in the auction mechanism types that
    allow Users to specify whethervolume orexecutions in the various named
    auction mechanisms will count toward the User's class, EFID, or EFID
    Group limitis reasonable because orders executed through these auction
    mechanisms are subject to different protections, such as price
    improvement requirements, as compared to other order types. As a
    result, these orders have different risk considerations. The Exchange
    notes that this functionality is optional, and Users may continue to
    include executions resulting from these exchange auctions in their risk
    parameters (as is the case today) if they prefer. Additionally, the
    Exchange believes the proposed changes are not unfairly discriminatory,
    as the risk controls and protection mechanisms that will be applied to
    SCOA are currently available for other auction types. Additionally, the
    risk controls and protection mechanisms are available to all Users and
    applied uniformly to all Users who may choose to utilize enhanced risk
    parameter settings.
        Last, the Exchange believes correcting a grammatical error by
    replacing ``appointed'' with ``appointment'' in Rule 5.33(d)(1)(D) will
    eliminate confusion in this provision of the rule.

    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 proposed rule change is
    intended to provide market participants with new voluntary
    functionality to automate a manual monitoring process to determine when
    to execute an order in the event that a specific condition has been
    met. 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 stop-
    limit complex orders will be available to all Users and processed in
    the same manner. A stop-limit complex order is a type of complex order
    that is intended to achieve the execution of a complex order that Users
    can achieve today through manual monitoring and order submissions.
    Stop-limit complex orders offer market participants an automated
    alternative to this manual process. The proposed rule change provides
    all Users with the ability to submit a stop-limit complex order, which
    will be processed through SCOA once the trigger condition for the order
    has been met. Use of a stop-limit complex order (as well as the trigger
    condition) will be voluntary and within the discretion of a User, and a
    User may continue to manage complex orders to achieve an execution of a
    complex order under certain conditions in the same manner they do
    today. Additionally, SCOA messaging for an order will be sent to all
    Users who are recipients of auction messaging data, and all Users
    generally may submit responses to the auction if they so choose.
        The Exchange does not believe 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, as the proposed
    rule changes apply only to a permissible User order instruction
    regarding how the Exchange will handle and then execute an order. Stop-
    limit complex orders extend functionality that is available today on
    the Exchange

    [[Page 14742]]

    in stop-limit orders for simple orders to complex orders, and SCOA will
    utilize certain COA functionality that is currently used on the
    Exchange. Additionally, to the extent that the proposed changes may
    make the Exchange a more attractive trading venue for market
    participants on other exchanges, such market participants may elect to
    become Exchange market participants.

    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

        Within 45 days of the date of publication of this notice in the
    Federal Register or within such longer period (i) as the Commission may
    designate up to 90 days of such date if it finds such longer period to
    be appropriate and publishes its reasons for so finding or (ii) as to
    which the Exchange consents, the Commission shall: (a) by order approve
    or disapprove such proposed rule change, or (b) institute proceedings
    to determine whether the proposed rule change should be 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 rule-comments@sec.gov. Please include
    file number SR-CBOE-2026-024 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-2026-024. 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-2026-024 and should be submitted on
    or before April 16, 2026.

        For the Commission, by the Division of Trading and Markets,
    pursuant to delegated authority.\19\
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        \19\ 17 CFR 200.30-3(a)(12).
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    Vanessa A. Countryman,
    Secretary.
    [FR Doc. 2026-05845 Filed 3-25-26; 8:45 am]
    BILLING CODE 8011-01-P