[Federal Register Volume 91, Number 93 (Thursday, May 14, 2026)]
[Notices]
[Pages 27444-27449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-09597]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105437; File No. SR-CBOE-2026-046]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
its Fees Schedule To Make Changes in Connection With the Fees Related
to Certain Orders Executed in Automated Improvement Mechanism Auctions,
Amend the Customer Volume Incentive Program and Affiliated Volume Plan,
and Amend the Cboe Options Historical Depth Description
May 11, 2026.
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 1, 2026, 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 to make changes in connection with the fees
related to certain orders executed in Automated Improvement Mechanism
(``AIM'') Auctions, amend the Customer Volume Incentive Program and
Affiliated Volume Plan, and amend the Cboe Options Historical Depth
description. 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 its Fees Schedule, effective May 1,
2026.
AIM Fee Changes
First, the Exchange proposes changes in connection with the fees
related to certain orders executed in AIM Auctions.\3\
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\3\ The Exchange notes that the changes described herein will
apply similarly to applicable AM, FLEX AIM and FLEX SAM orders,
which is consistent with the structure of the Exchange's current
fees for AIM Contra orders, which apply uniformly to qualifying
orders in AIM, SAM, FLEX AIM, and FLEX SAM. See Fees Schedule
Footnote 18.
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By way of background, AIM includes functionality in which a Trading
Permit Holder (``TPH'') (an ``Initiating TPH'') may electronically
submit for execution an order it represents as agent on behalf of
certain customers (``Agency Order'')
[[Page 27445]]
against any other order it represents as agent, as well as against
principal interest in AIM only, (an ``Initiating Order'') provided it
submits the Agency Order for electronic execution into the AIM
Auction.\4\ The Exchange may designate any class of options traded on
Cboe Options as eligible for AIM. The Exchange notes that all Users,
other than the Initiating TPH, may submit responses to an Auction
(``AIM Responses'').\5\ AIM Auctions take into account AIM Responses to
the applicable Auction as well as contra interest resting on the Cboe
Options Book at the conclusion of the Auction (``unrelated orders''),
regardless of whether such unrelated orders were already present on the
Book when the Agency Order was received by the Exchange or were
received after the Exchange commenced the applicable Auction. If
contracts remain from one or more unrelated orders at the time the
Auction ends, they are considered for participation in the AIM order
allocation process.
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\4\ See Rule 5.37.
\5\ For purposes of this filing and the proposed fee, the term
``AIM Response'' will include responses submitted to AIM and SAM
Auctions.
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The Fees Schedule contains specific transaction fees for orders
executed using AIM. For example, the Exchange assesses a fee of $0.23
per contract for Market-Maker (``M'' Capacity Code) AIM Contra orders
in equity, Exchange Traded Funds (``ETF'') and ETN options products,
yielding fee code MA. The Exchange notes that under the Fees Schedule,
fees for AIM Contra orders apply uniformly to qualifying orders in SAM,
FLEX AIM and FLEX SAM.\6\
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\6\ See Fees Schedule Footnote 18.
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The Exchange notes that it recently updated its rules to permit
orders for the accounts of Market-Makers with an appointment in the
applicable class on the Exchange, in all classes, to be solicited for
the Initiating Order submitted for execution against an Agency Order
into a simple AIM, simple SAM, FLEX AIM or FLEX SAM Auction.\7\
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\7\ See Securities Exchange Act Release No. 105049 (March 19,
2026), 91 FR 14057 (March 24, 2026) (SR-CBOE-2025-090).
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Currently, fee code YC is appended to all Customer (capacity
``C''), Clearing TPHs (capacity ``F''), Non-Clearing TPH Affiliates
(capacity ``L''), Broker-Dealer (capacity ``B''), Joint Back-Office
(capacity ``J''), Non-TPH Market-Maker (capacity ``N''), and
Professional (capacity ``U'') (collectively, ``Non-Market Maker'')
Simple AIM Contra orders in equity, ETF and ETN options products and
assesses a fee of $0.07 per contract. Further, fee code MA is appended
to Market-Maker Simple AIM Contra orders in equity, ETF, and ETN
options products and assesses a fee of $0.23 per contract, which may be
slightly reduced via the Liquidity Provider Sliding Scale, yet remains
higher than the $0.07 per contract fee assessed to Non-Market Makers
via fee code YC. To align Market-Maker Simple AIM Contra orders in
equity, ETF, and ETN products with those for Non-Market Makers, the
Exchange proposes to adopt fee code YM, which would be appended to
Market-Maker Simple AIM Contra orders in equity, ETF and ETN products
and assess a fee of $0.07 per contract.\8\
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\8\ The Exchange proposes to amend Footnote 10 to state that
volume executed via Market-Maker Simple AIM Contra orders in equity,
ETF and ETN products is excluded from the Liquidity Provider Sliding
Scale program.
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The Exchange also proposes to adopt a $0.20 per contract surcharge
for Market-Maker Simple AIM Contra orders in Cboe Volatility Index
(``VIX'') options. Currently, fee code BR is appended to Broker-Dealer
(capacity ``B''), Joint Back-Office (capacity ``J''), Non-TPH Market-
Maker (capacity ``N''), and Professional (capacity ``U'')
(collectively, ``Non-Market Maker, Non-Customer, Non-Firm'') orders in
VIX options (as well as OEX and XEO options) and assesses a fee of
$0.40 per contract, while fee codes MV or MW are appended to Market-
Maker orders in VIX options, depending on the premium, and are assessed
$0.05 (for fee code MV) or $0.23 (for fee code MW) per contract. The
Exchange proposes to adopt a $0.20 per contract surcharge to apply to
Market-Maker AIM (including SAM, FLEX AIM and FLEX SAM) Contra orders,
to bring the fees more in-line with those applicable to Non-Market
Maker, Non-Customer, Non-Firm orders.
The Exchange proposes to amend fee codes applicable to Non-Market
Maker, Non-Customer, Non-Firm orders in Russell 2000 Index (``RUT'')
options. Currently, fee code BS is appended to Non-Customer, Non-Market
Maker, Non-Firm manual and AIM orders in RUT options and assesses a fee
of $0.25 per contract; fee code BK is appended to Non-Customer, Non-
Market Maker, Non-Firm electronic or Non-AIM orders in RUT options and
assesses a fee of $0.65 per contract; and fee code MT is applied to
Market-Maker (capacity ``M'') AIM orders in RUT options and assesses a
fee of $0.30 per contract.
The Exchange now proposes to update fee code BS to apply only to
manual orders in VIX [sic] options; there are no changes to the
assessed fee. The Exchange also proposes to amend fee code BK to apply
to electronic orders (including AIM), and to assess a fee of $0.55 per
contract.
Customer Volume Incentive Program and Affiliated Volume Plan
The Exchange proposes to amend the Customer Volume Incentive
Program (``VIP'') and the Affiliated Volume Plan (``AVP''). Under the
VIP, the Exchange credits each TPH the per contract amount set forth in
the VIP table for Public Customer (origin code ``C'') orders
transmitted by TPHs (with certain exceptions) \9\ and executed
electronically on the Exchange, provided the TPH meets certain volume
thresholds in a month; volume for Professional Customers (origin code
``U''), Broker-Dealers (origin code ``B''), and Joint Back-Offices
(``JBO'') (origin code ``J'') orders are counted toward reaching such
thresholds.\10\ Specifically, the percentage thresholds are calculated
based on the percentage of national customer volume in all underlying
symbols excluding Underlying Symbol List A,\11\, Sector Indexes,\12\,
DJX, CBTX, MBTX, MGTN, MRUT, MXEA, MXEF, MXACW, MXUSA, MXWLD, NANOS,
SPEQX, SPESG, XSP and FLEX Micros entered and executed over the course
of the month. VIP offers rates for both Complex and Simple orders (both
in AIM and Non-AIM orders).
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\9\ See Cboe Options Fees Schedule, Footnote 36.
\10\ See Cboe Options Fees Schedule, Volume Incentive Program.
\11\ See Cboe Options Fees Schedule, Footnote 34.
\12\ See Cboe Options Fees Schedule, Footnote 47.
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Currently, VIP offers 4 tiers. Particularly, a TPH may meet the
criteria under Tier 1 if its qualifying volume in the qualifying
classes is above 0% and up to 0.75% of national customer volume, under
Tier 2 if its qualifying volume in qualifying classes is above 0.75%
and up to 2.00% of national customer volume, under Tier 3 if its
qualifying volume in the qualifying classes is above 2.00% and up to
4.00% of national customer volume, under Tier 4 if its qualifying
volume in the qualifying classes is above 4.00%.
The Exchange proposes to adopt new Tier 5. A TPH may meet the
criteria under proposed Tier 5 if its qualifying volume in the
qualifying classes is above 5.00%. As a result of the proposed change,
the Exchange also proposes to amend Tier 4 criteria to provide that a
TPH may meet the criteria under Tier 4 if its qualifying volume in the
qualifying classes is above 4.00% and up to 5.00%.
Under proposed Tier 5, the Exchange proposes VIP credit rates of
$0.17 for Simple Non-AIM contracts, $0.14 for
[[Page 27446]]
Simple AIM contracts, $0.25 for Complex Non-AIM contracts, and $0.24
for Complex AIM contracts.
The VIP offers both rates for Complex and Simple orders. The VIP
provides that a TPH will only receive the Complex credit rates for both
its Complex AIM and Non-AIM volume if at least 32% for Tiers 1, 2, and
3 or 38% for Tier 4 of that TPH's qualifying VIP volume in the previous
month was comprised of Simple volume. If the TPH's previous month's
volume does not meet the applicable volume thresholds, then the TPH's
Customer (C) Complex volume will receive credits at the Simple rate
only (i.e., all volume, both Simple and Complex, will receive credits
at the applicable Simple rate). In light of the proposed adoption of
Tier 5, the Exchange proposes to amend the program to provide that that
a TPH will only receive the Complex credit rates for both its Complex
AIM and Non-AIM volume if at least 32% for Tiers 1, 2, and 3 or 38% for
Tiers 4 and 5 of that TPH's qualifying VIP volume in the previous month
was comprised of Simple volume.
The proposed changes are designed to incentivize more volume to
earn credits while also maintaining an incremental incentive for TPHs
to strive for the highest tier level. The Exchange expects the impact
of the change to be minimal, as currently, one TPH qualifies for Tier
4. Further, under current Tier 4 and proposed Tier 5, the VIP credit
rates are the same for Complex AIM contracts (i.e., $0.25 for Non-AIM
contracts and $0.24 for AIM contracts) and for Simple AIM contracts
(i.e., $0.14).The difference between VIP credit rates for Simple Non-
AIM contracts are $0.02 (i.e., $0.15 for Tier 4 Simple Non-AIM
contracts and $0.17 for Tier 5 Simple Non-AIM contracts).
The proposed changes are also designed to increase the amount of
volume TPHs provide on the Exchange and further encourage them to
contribute to a deeper, more liquid market, as well as to increase
transactions and take such execution opportunities provided by such
increased liquidity. The Exchange believes that this, in turn, benefits
all market participants by contributing towards a robust and well-
balanced market ecosystem. The Exchange notes the proposed tiers are
competitively achievable for all TPHs that submit significant customer
order flow, in that all firms that submit the requisite significant
customer order flow could compete to meet the tiers.
The Exchange proposes to make corresponding amendments to the
Affiliated Volume Plan (``AVP''). Under AVP, if a Market-Maker
Affiliate \13\ (``Affiliate OFP'') or Appointed OFP \14\ receives a
credit under the VIP, the Market-Maker will receive an access credit on
its BOE Bulk Ports corresponding to the VIP tier reached as well as a
transaction fee credit on its sliding scale Market-Maker transaction
fees (not including any additional surcharges or fees assessed as part
of the Liquidity Provider Sliding Scale Adjustment Table). In
connection with the proposed changes to the VIP, the Exchange proposes
to make a corresponding change to the AVP and adopt VIP Tier 5, with a
Market-Maker Affiliate Access Credit of 25% and Liquidity Provider
Sliding Scale Credit of 35%. All other Tiers and corresponding Market-
Maker Affiliate Access Credits and Liquidity Provider Sliding Scale
Credits remain unchanged under the proposed rule change.
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\13\ For purposes of AVP, ``Affiliate'' is defined as having at
least 75% common ownership between the two entities as reflected on
each entity's Form BD, Schedule A.
\14\ See Cboe Options Fees Schedule Footnote 23. Particularly, a
Market-Maker may designate an Order Flow Provider (``OFP'') as its
``Appointed OFP'' and an OFP may designate a Market-Maker to be its
``Appointed Market-Maker'' for purposes of qualifying for credits
under AVP.
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Cboe Options Historical Depth
Finally, the Exchange also proposes to amend the Cboe Options
Historical Depth description to remove language that is no longer
applicable. Specifically, the Exchange proposes to remove ``This
discount cannot be combined with any other discount offered by the
Exchange.'' This language referred to a previous discount that was
removed from the Exchange's Fee Schedule on February 25, 2026.\15\ As
this discount is no longer on the Exchange's Fee Schedule, the Exchange
proposes to remove this supplementary language to clean up the
Exchange's Fee Schedule.
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\15\ See Securities Exchange Act Release No. 104910 (March 2,
2026), 91 FR 10841 (March 5, 2026) (SR-CBOE-2026-021).
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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.\16\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \17\ 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) \18\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes the proposed rule
change is consistent with Section 6(b)(4) of the Act,\19\ which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its TPHs and other
persons using its facilities.
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\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(5).
\18\ Id.
\19\ 15 U.S.C. 78f(b)(4).
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AIM Fee Changes
The Exchange believes the proposed changes in connection with the
fees related to certain orders executed in the AIM Auctions are
reasonable, equitable, and not unfairly discriminatory.
The Exchange believes it is reasonable to adopt fee code YM and
assess Market-Maker Simple AIM Contra orders in equity, ETF, and ETN
options products a fee of $0.07 per contract, which is the same rate
currently assessed to Non-Market Maker Simple AIM Contra orders via fee
code YC. As noted above, the Exchange recently updated its rules to
permit orders for the accounts of Market-Makers with an appointment in
the applicable class. [sic] in all classes, on the Exchange to be
solicited for the Initiating Order submitted for execution against an
Agency Order in a simple AIM or simple SAM Auction. Given this change,
the Exchange believes it is equitable and not unfairly discriminatory
to assess Market-Maker Simple AIM Contra orders the same $0.07 per
contract fee assessed to Non-Market Maker Simple AIM Contra orders, as
both are able to be the contra side in a simple AIM Auction.
The Exchange believes it is reasonable to adopt a $0.20 per
contract surcharge applicable to Market-Maker AIM Contra orders in VIX
options. The proposed surcharge brings the total fees assessed to
Market-Makers acting as AIM Contra participants in VIX more in-line
with the $0.40 per contract assessed under fee code BR to Non-Market
Maker, Non-Customer, Non-Firm AIM Contra orders
[[Page 27447]]
in VIX options. As noted above, based on the current Fees Schedule,
Market-Makers acting as AIM Contra participants would be assessed $0.05
per contract (for options with a premium below $0.10, yielding fee code
MV) or $0.23 per contract (for options with a premium of $0.10 or
above, yielding fee code MW). The Exchange believes the proposed $0.20
per contract surcharge is equitable and not unfairly discriminatory, as
it is designed to bring Market-Maker AIM Contra fees more in-line with
Non-Market Maker AIM Contra fees, given the current Market-Maker fee
structure for VIX options.
The Exchange also believes it is reasonable, equitable, and not
unfairly discriminatory to amend the fee structure for Non-Market
Maker, Non-Customer, Non-Firm orders in VIX options. As noted above,
under the current Fees Schedule, the fee assessed for Market-Maker AIM
orders in RUT options ($0.30 per contract for orders yielding fee code
MT) is higher than the fee assessed for Non-Market Maker, Non-Customer,
Non-Firm AIM orders in RUT options ($0.25 per contract for orders
yielding fee code BS). By updating fee code BK to apply to electronic
orders including AIM orders in RUT options at $0.55 per contract, the
Exchange is effectively increasing the fee assessed to Non-Market
Maker, Non-Customer, Non-Firm participants for AIM orders in RUT
options, while simultaneously slightly reducing the fee assessed to
those same participants for other, non-AIM electronic orders. Given the
recent change to permit orders for the accounts of Market-Makers with
an appointment in the applicable class on the Exchange, in all classes,
to be solicited for the Initiating Order submitted for execution
against an Agency Order, the Exchange believes the proposed changes
will facilitate and encourage the submission of AIM orders in RUT
options through local Market-Makers. Incentivizing Market-Maker
participation in RUT AIM auctions benefits all participants by
promoting deeper liquidity, tighter markets, and greater price
improvement opportunities.
Customer Volume Incentive Program and Affiliated Volume Plan
The Exchange believes the proposed amendments to the VIP (and
corresponding amendments to AVP) to adopt Tier 4 [sic] and to amend the
volume threshold for Tier 4 to be above 4.00%-5.00%, is reasonable
because it continues to encourage TPHs to take the opportunity to
receive credits on Customer orders by reaching the proposed volume
thresholds. The Exchange notes that relative volume-based incentives
and discounts have been widely adopted by exchanges \20\ and are
reasonable, equitable and non-discriminatory because they are open to
all TPHs on an equal basis and provide additional benefits or discounts
that are reasonably related to (i) the value to an exchange's market
quality and (ii) associated higher levels of market activity, such as
higher levels of liquidity provision and/or growth patterns.
Additionally, the Exchange operates in a highly competitive market. The
Exchange is only one of several options venues to which market
participants may direct their order flow. Competing options exchanges
offer similar tiered pricing structures to that of the Exchange,
including schedules of rebates/credits and fees that apply based upon
members achieving certain volume and/or growth thresholds. These
competing pricing schedules, moreover, are presently comparable to
those that the Exchange provides, including the pricing of comparable
tiers.\21\
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\20\ See e.g., NASDAQ Stock Market Rules, Options Rules, Options
7 Pricing Schedule, Sec. 2 Options Market--Fees and Rebates, Tiers
1-6; see also NYSE Arca Options, Fees and Charges, Customer Posting
Credit Tiers in Non-Penny Issues.
\21\ Id.
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The Exchange believes adjusting the VIP volume thresholds by
adopting Tier 5 (and making corresponding changes to the AVP) and
amending the volume threshold for Tier 4 is reasonable because it will
continue to encourage TPHs to increase their order flow to the Exchange
based on increasing their Customer, Professional Customer, Broker-
Dealer, and JBO executed orders as a percentage of national customer
volume. Particularly, the Exchange believes the proposed threshold
change is reasonable because it will encourage increased volume to
receive a higher per contract credit for Non-AIM Simple orders,
resulting in a deeper, more liquid market, and an increase in
transaction opportunities provided by the increased liquidity. In turn,
these increases benefit all TPHs by contributing towards a robust and
well-balanced market ecosystem. Increased overall order flow benefits
all investors by deepening the Exchange's liquidity pool, providing
greater execution incentives and opportunities, offering additional
flexibility for all investors to enjoy cost savings, supporting the
quality of price discovery, promoting market transparency, and
improving investor protection.
While the Exchange has no way of knowing whether this proposed rule
change would definitively result in any particular TPH qualifying for
the proposed tier, the Exchange anticipates that approximately one to
two TPHs may be able to compete for and achieve the proposed criteria
of the proposed Tier 5; however, the proposed tier is open to any TPH
that satisfies the tier's criteria. The Exchange believes the proposed
tier could provide an incentive for other TPHs to submit increased
volumes to qualify for the proposed enhanced credit.
The proposed volume thresholds also do not represent a significant
departure from the current required criteria under the Exchange's
existing tiers and is therefore still reasonable based on the
difficulty of satisfying the tiers' criteria and ensures the existing
credit and proposed thresholds appropriately reflect the incremental
difficulty to achieve the existing VIP tiers. Further, the Exchange
believes that the amendments are reasonable because it will still allow
TPHs transmitting qualifying orders that reach a threshold of above
4.00% to receive either the same credit for doing so, in the case of
Simple and Complex Non-AIM Contracts and Complex AIM Contracts, or a
$0.02 greater credit for Simple AIM Contracts. Finally, the changes to
the AVP are reasonable because the AVP utilizes the VIP tier structure,
and thus, any changes to the VIP tiers must be incorporated into the
AVP.
The Exchange believes proposed Tier 5 and Tier 4, as amended,
remain in line with existing tiers, both in required criteria and
credits. For example, the volume threshold amount under existing Tier 1
is currently set as a range within a 0.75 percentage point (0%--0.75%),
Tier 2 is currently set as a range within a 1.25 percentage point
(between 0.75% up to 2.00%), and Tier 3 is currently set as a range
within 2 percentage points (2.00% up to 4.00%. It is reasonable to
incrementally increase the range for Tier 4 to be within 1 percentage
points (between 4.00% and up to 5.00%), and then over 5.00% for Tier 5,
as proposed, since higher credits are available for higher tiers, with
the exception of Tier 5 which offers the same credits as Tier 4 except
for Simple Non-AIM Contracts. The Exchange also believes that the
tiers, as amended, are in a reasonable increment to encourage overall
order flow to the Exchange without so significantly increasing the
difficulty in reaching the tiers' criteria.
The Exchange believes that the proposal represents an equitable
allocation of rebates and is not unfairly discriminatory because all
TPHs have the opportunity to meet the tier thresholds. The Exchange
also notes that the proposed changes will not adversely impact any
TPH's pricing or
[[Page 27448]]
ability to qualify for other credit tiers. Rather, should a TPH not
meet the proposed criteria, the TPH will merely not receive the
proffered credit, for both the VIP and AVP.
Cboe Options Historical Depth
The Exchange believes that the proposed rule change related to the
Cboe Options Historical Depth fee will remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and in general, will protect investors and the public interest
by improving accuracy and clarity within the Fees Schedule.
Specifically, by removing language that references a previously removed
discount, the proposed rule change is designed to protect investors by
making the Fees Schedule more accurate and adding clarity to the Fees
Schedule, thereby mitigating any potential investor confusion. The
proposed rule change will have no impact on trading on the Exchange or
fees assessed by the Exchange, as the proposed Fees Schedule change is
non-substantive in nature, and there are no changes to fees assessed as
a result of the proposal.
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.
AIM Fee Changes
The Exchange does not believe that the proposed rule changes
related to fees for certain orders executed in AIM Auctions will impose
any burden on intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. In general, the
proposed changes are designed to bring fees for Market-Maker AIM Contra
orders more in-line with similar fees for other participants, given the
recent change to permit orders for the accounts of Market-Makers with
an appointment in the applicable class on the Exchange, in all classes,
to be solicited for the Initiating Order submitted for execution
against an Agency Order. The Exchange believes the proposed changes
will facilitate and encourage the submission of AIM orders in equity,
ETF and ETN, RUT, and VIX options through local Market-Makers.
Incentivizing Market-Maker participation in these AIM auctions benefits
all participants by promoting deeper liquidity, tighter markets, and
greater price improvement opportunities.
The amended fee for Market-Maker Simple AIM Contra orders in
equity, ETF, and ETN options and $0.20 per contract surcharge for
Market-Maker AIM Contra orders in VIX options will apply uniformly to
all Market-Makers acting as AIM contra on applicable orders. Similarly,
the amended fee structure for Non-Market Maker, Non-Customer, Non-Firm
orders in VIX options will apply uniformly to all applicable Non-Market
Maker, Non-Customer, Non-Firm orders in VIX options. While the proposed
change results in an increase in the fee assessed to Non-Market Maker,
Non-Customer, Non-Firm participants for AIM orders in RUT options, the
Exchange believes such increase will facilitate and encourage the
submission of AIM orders in RUT options through local Market-Makers,
which benefits all participants by promoting deeper liquidity, tighter
markets, and greater price improvement opportunities. The Exchange
notes that use of the AIM auction mechanism is voluntary.
The Exchange believes the proposed rule change to the VIP and AVP
does not impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
Exchange believes that the proposed changes to the VIP, and
corresponding changes to the AVP, will encourage the submission of
additional liquidity to a public exchange, thereby promoting market
depth, price discovery and transparency and enhancing order execution
opportunities for all TPHs. As a result, the Exchange believes that the
proposed change furthers the Commission's goal in adopting Regulation
NMS of fostering competition among orders, which promotes ``more
efficient pricing of individual stocks for all types of orders, large
and small.'' \22\ Further, the proposed change applies to all TPHs
submitting qualified orders equally, in that all TPHs submitting such
orders are eligible for the tiers (as amended), have a reasonable
opportunity to meet the tiers' criteria (as amended) and will all
receive the existing credit if such criteria is met. As described
above, while only certain orders would count towards the qualifying
thresholds, specifically, Customers, Professionals, Broker-Dealers and
JBOs, these market participants' orders are primarily executed as
agency orders, whose order flow would bring greater volume and
liquidity, which benefits all market participants by providing more
trading opportunities and tighter spreads. Overall, the proposed change
is designed to encourage additional order flow to the Exchange, which
the Exchange believes benefits all market participants on the Exchange
by providing more liquidity, thus trading opportunities, encouraging
even more TPHs to send orders, thereby contributing towards a robust
and well-balanced market ecosystem to the benefit of all market
participants.
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\22\ See Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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The Exchange does not believe that the proposed rule change to
related to the Cboe Options Historical Depth fee will impose any burden
on intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act. As noted above, the proposed
rule change is designed to protect investors by making the Fees
Schedule more accurate and adding clarity to the Fees Schedule, thereby
mitigating any potential investor confusion. The proposed rule change
will have no impact on trading on the Exchange or fees assessed by the
Exchange, as the proposed Fees Schedule change is non-substantive in
nature, and there are no changes to fees assessed as a result of the
proposal.
Finally, the Exchange believes the proposed rule changes do not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. In regards to
the fee changes related to AIM Contra orders in RUT or VIX options, the
proposed fees apply to an Exchange proprietary product, which are
traded exclusively on the Exchange. In regards to the other fee
changes, the Exchange notes that it operates in a highly competitive
market. Members have numerous alternative venues that they may
participate on and direct their order flow, including 17 other options
exchanges. Based on publicly available information, no single options
exchange has more than 15% of the market share.\23\ Therefore, no
exchange possesses significant pricing power in the execution of option
order flow. Indeed, participants can readily choose to send their
orders to other exchange, and, additionally off-exchange venues, if
they deem fee levels at those other venues to be more favorable.
Moreover, the Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices
[[Page 27449]]
and SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \24\ The fact that this market is competitive
has also long been recognized by the courts. In NetCoalition v.
Securities and Exchange Commission, the D.C. Circuit stated as follows:
``[n]o one disputes that competition for order flow is `fierce.' . . .
As the SEC explained, `[i]n the U.S. national market system, buyers and
sellers of securities, and the broker-dealers that act as their order-
routing agents, have a wide range of choices of where to route orders
for execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . ..''.\25\ Accordingly, the Exchange does not believe its
proposed fee change imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\23\ See Cboe Global Markets U.S. Options Monthly Market Volume
Summary (April 30, 2026), available at https://markets.cboe.com/us/options/market_statistics/.
\24\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\25\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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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
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-2026-046 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-2026-046. 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-2026-046 and
should be submitted on or before June 4, 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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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-09597 Filed 5-13-26; 8:45 am]
BILLING CODE 8011-01-P