Notice2025-13731
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule With Respect to Its Frequent Trader Program and To Clarify Criteria Related to Its Floor Broker Sliding Scale Supplemental Rebate Program
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 22, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 138 (Tuesday, July 22, 2025)</title>
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[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Notices]
[Pages 34537-34539]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13731]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103490; File No. SR-CBOE-2025-050]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule With Respect to Its Frequent Trader Program and To
Clarify Criteria Related to Its Floor Broker Sliding Scale Supplemental
Rebate Program
July 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 July 16, 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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[[Page 34538]]
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 with respect to its Frequent Trader Program
and to clarify criteria related to its Floor Broker Sliding Scale
Supplemental Rebate Program. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (<a href="https://www.cboe.com/us/options/regulation/rule_filings/">https://www.cboe.com/us/options/regulation/rule_filings/</a>) and at the Exchange's Office of the Secretary.
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.\3\
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\3\ The Exchange initially filed the proposed fee changes on
July 1, 2025 (SR-CBOE-2025-045). On July 9, 2025, the Exchange
withdrew that filing and submitted SR-CBOE-2025-048. On July 16,
2025, the Exchange withdrew that filing and submitted this filing.
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By way of background, through the Frequent Trader Program, the
Exchange offers transaction fee rebates to Customers and Professional
Customers (origin codes ``C'' and ``U'', respectively) (collectively
``Customers'') that meet certain volume thresholds in VIX, SPX
(including SPXW) and RUT options, provided the Customer registers for
the program (the ``Frequent Trader Program'' or ``Program''). Once
registered, the Customer is provided a unique identification number
(``FTID'') that can be affixed to each of its orders. The FTID allows
the Exchange to identify and aggregate all electronic and manual trades
during both the Regular Trading Hours and Global Trading Hours sessions
from that Customer for purposes of determining whether the Customer
meets any of the various volume thresholds. The Customer has to provide
its FTID to the Trading Permit Holder (``TPH'') submitting that
Customer's order to the Exchange (``executing agent'' or ``executing
TPH'') and that executing TPH would have to enter the Customer's FTID
on each of that Customer's orders.\4\
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\4\ The Exchange notes that it is the responsibility of the
Customer to request that the executing TPH affix its FTID to its
order(s), and that it is voluntary for the executing TPH to do so.
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The Exchange proposes changes to the Fees Schedule to amend the
Program. Pursuant to the proposed changes, when Customers eligible for
the Program trade via sub-funds that are all part of the same larger
fund (``FTID Group''), individual FTID trading activity may be
aggregated across all FTIDs that are part of that FTID Group to qualify
for the Program tiers and corresponding fee rebates. Any fee rebates
received under the Program will be calculated individually for each
Customer based on their individual volume using the rebate rate
associated with the volume tier achieved by the FTID Group.
Consider the following example, which shows three individual FTIDs
belonging to one FTID Group, along with their associated monthly
volume. Under the current Program, none of the individual FTIDs would
achieve the minimum rebate tier. However, as an FTID Group, the
aggregated monthly SPX volume of 20,500 contracts would allow for each
of the individual FTIDs to achieve the Tier 1 (i.e., 3%) fee rebate.
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SPX contracts
FTID executed in a
month
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1AAAAA................................................ 5,000
2BBBBB................................................ 7,500
3CCCCC................................................ 8,000
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Under the proposed changes, each FTID can only be associated with
one FTID Group. The fund operator may establish a FTID Group by
registering at the Program website \5\ no later than 5:00 p.m. ET,
three days prior to the last business day of the month and prior to the
start of the month for which aggregation will take effect. The Exchange
believes the proposed change will continue to encourage increased
trading volume and simplify operational processes for fund operators,
while continuing to preserve the calculation of rebates based on each
individual FTID's trading volume.
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\5\ <a href="https://www.cboe.com/us/options/trading/frequent_trader_program/">https://www.cboe.com/us/options/trading/frequent_trader_program/</a>.
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The Exchange also proposes a clarifying change to its Floor Broker
Sliding Scale Supplemental Rebate Program (``Supplemental Rebate
Program''). Under the Supplemental Rebate Program, the Exchange
calculates rebates based on qualifying, and eligible TPHs receive
rebates only on qualifying Non-Firm Facilitated orders processed
through the Floor Broker Sliding Scale Rebate Program (specifically,
Non-Customer, Non-Strategy Floor Broker orders that do not yield fee
code FF). The Supplemental Rebate Program has four tiers, each with its
own criteria based on FLEX Floor Broker Volume (which is meant to
include applicable FLEX Volume across all channels (i.e., manual and
electronic)) and corresponding rebate. To avoid confusion, Exchange
proposes to amend each tier criteria to refer to FLEX Volume, rather
than FLEX Floor Broker Volume. There are no changes to the operation of
the Supplemental Rebate Program, including rebates offered, as a result
of the change.
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.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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) \8\ 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,\9\ which requires
that Exchange rules provide for the equitable allocation of reasonable
dues, fees, and other charges among its Trading Permit Holders and
other persons using its facilities.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
\9\ 15 U.S.C. 78f(b)(4).
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[[Page 34539]]
The Exchange believes that its proposed change to amend the Program
is consistent with Section 6(b)(4) of the Act in that the proposed rule
change is reasonable, equitable and not unfairly discriminatory. The
Exchange believes the proposed change is reasonable in that the change
is designed to promote operational efficiencies for Program
administration. In many cases sub-funds operate as part of a unified
investment strategy. Due to current Program restrictions, eligible
Customers that trade via sub-funds may be inadvertently disadvantaged
due to this organizational structure, as firms may choose not to
utilize the Program due to the administrative burden of allocating
rebates received if they register for the Program at the parent level
to accommodate this organizational structure. The Exchange believes
that allowing individual FTID trading activity to be aggregated across
all FTIDs that are part of an FTID Group will promote a more efficient
operation of the Program and encourage increased Customer trading
volume by making the Program simpler to implement, while continuing to
preserve the calculation of rebates based on each individual FTID's
trading volume.
Further, the Exchange believes the proposed Program change is
equitable and not unfairly discriminatory because the proposed Program
changes are available to all Customers eligible for the Program that
meet the requirements (i.e., trade via sub-funds that are part of the
same larger fund). Further, any fund operator can establish a FTID
Group, subject to the same requirements which are publicly available on
the Exchange website and in the Fees Schedule. As noted above, each
FTID can only be associated with one FTID Group, and rebates, while
based on the volume tier achieved by the group, will be calculated
individually for each Customer based on their individual volume.
Additionally, the Exchange believes the proposed change to clarify
the criteria for its Supplemental Rebate Program 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. Similarly, the Exchange believes that its proposed
change to clarify the criteria for its Supplemental Rebate Program is
consistent with Section 6(b)(4) of the Act. The proposed change merely
clarifies that applicable FLEX Volume across all channels (i.e., manual
and electronic) qualifies for purposes of meeting the tier criteria
under the Supplemental Rebate Program. Overall, the changes are
intended to add clarity to the Fees Schedule, thereby mitigating any
potential confusion, to the benefit of investors. As noted above, there
are no changes to the operation of the Supplemental Rebate Program,
including rebates offered, as a result of the change.
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 changes to the
Program will apply uniformly to all eligible Customers who trade via
sub-funds that are all part of a registered FTID Group. The Exchange
does not believe the proposed clarifying rule changes will impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act, as the changes will not
result in any practical changes to the Supplemental Rebate Program, but
rather are being added to eliminate potential confusion.
The Exchange does not believe that the proposed rule changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed rule change related to the Program applies to Exchange
proprietary products, which are traded exclusively on the Exchange. To
the extent that the proposed changes make Cboe Options a more
attractive marketplace for market participants at other exchanges, such
market participants are welcome to become Cboe Options market
participants. The clarifying rule changes are not intended to have any
impact on competition, as they make no substantive change to the Fees
Schedule and will have no impact on trading on the Exchange.
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 \10\ and paragraph (f) of Rule 19b-4 \11\
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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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#e092958c85cd838f8d8d858e9493a0938583ce878f96"><span class="__cf_email__" data-cfemail="1163647d743c727e7c7c747f6562516274723f767e67">[email protected]</span></a>. Please include
file number SR-CBOE-2025-050 on the subject line.
Paper Comments
<bullet> 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-2025-050. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-CBOE-2025-050 and should be submitted on
or before August 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13731 Filed 7-21-25; 8:45 am]
BILLING CODE 8011-01-P
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