Notice2025-15622
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Certain Lead Market-Maker (“LMM”) Incentive Programs by Increasing or Decreasing Quote Width and Size Requirements, and Increasing or Decreasing Rebate Amounts, as Applicable, and To Amend the Fees Schedule To Include Further Clarifying Information Regarding the Operation of Its LMM Incentive Programs
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
August 18, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 157 (Monday, August 18, 2025)</title>
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[Federal Register Volume 90, Number 157 (Monday, August 18, 2025)]
[Notices]
[Pages 40099-40106]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-15622]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103696; File No. SR-CBOE-2025-057]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Certain Lead Market-Maker (``LMM'') Incentive Programs by Increasing or
Decreasing Quote Width and Size Requirements, and Increasing or
Decreasing Rebate Amounts, as Applicable, and To Amend the Fees
Schedule To Include Further Clarifying Information Regarding the
Operation of Its LMM Incentive Programs
August 13, 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 August 7, 2025, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend certain Lead Market-Maker (``LMM'') Incentive Programs by
increasing or decreasing quote width and size requirements, and
increasing or decreasing rebate amounts, as applicable, and to amend
the Fees Schedule to include further clarifying information regarding
the operation of its LMM Incentive Programs. 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
August 1, 2025 (SR-CBOE-2025-052). On August 7, 2025, the Exchange
withdrew that filing and submitted SR-CBOE-2025-057.
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The Exchange proposes to amend its Fees Schedule in connection with
certain LMM Incentive Programs. Specifically, the Exchange proposes to
amend its Global Trading Hours (``GTH'') Cboe Volatility Index
(``VIX'') options and VIX Weekly (``VIXW'') options LMM Incentive
Programs, GTH S&P 500 Index (``SPX'') options and SPX Weekly (``SPXW'')
options LMM Incentive Programs, GTH Mini-SPX Index (``XSP'') options
LMM Incentive Programs, Cboe Mini Bitcoin U.S. ETF Index (``MBTX'')
options and MBTX Weekly (``MBTXW'') options LMM Incentive Program, Cboe
Bitcoin U.S. ETF Index (``CBTX'') options and CBTX Weekly (``CBTXW'')
options LMM Incentive Program, and S&P 500 Equal Weight Index
(``SPEQX'') options LMM Incentive Program.
All LMM Incentive Programs provide a rebate to Trading Permit
Holders (``TPHs'') with LMM appointments to the respective incentive
program that meet certain quoting standards in the applicable series in
a month. The Exchange notes that meeting or exceeding the quoting
standards (both current and as proposed; described in further detail
below) in each of the LMM Incentive Program products to receive the
applicable rebate (both currently offered and as proposed; described in
further detail below) is optional for an LMM appointed to a program.
Particularly, an LMM appointed to an incentive program is eligible to
receive the corresponding rebate if it satisfies the applicable quoting
standards, which the Exchange believes encourages appointed LMMs to
provide liquidity in the applicable class and trading session (i.e.,
Regular Trading Hours (``RTH'') or GTH). The Exchange may consider
other exceptions to the programs' quoting standards based on
demonstrated legal
[[Page 40100]]
or regulatory requirements or other mitigating circumstances. In
calculating whether an LMM appointed to an incentive program meets the
applicable program's quoting standards each month, the Exchange
excludes from the calculation in that month the business day in which
the LMM missed meeting or exceeding the quoting standards in the
highest number of the applicable series.
GTH VIX/VIXW LMM Incentive Program
The Exchange proposes to amend the GTH VIX/VIXW LMM Incentive
Program. The proposed program provides that, if the appointed LMM
provides continuous electronic quotes during GTH (i.e., from 7:15pm CST
to 8:25am CST the next day) that meet or exceed the VIXW and VIX basic
quoting standards \4\ in at least 95% of each of the VIX and VIXW
series, 90% of the time in a given month, the LMM will receive a rebate
for that month in the amount of $25,000 for VIX and $10,000 for VIXW
(or pro-rated amount if an appointment begins after the first trading
day of the month or ends prior to the last trading day of the month)
for that month.
---------------------------------------------------------------------------
\4\ Located in the ``GTH VIX/VIXW LMM Incentive Program'' table
in the Fees Schedule.
---------------------------------------------------------------------------
The Exchange proposes to adopt a new set of VIX heightened basic
quoting standards (below) under the GTH VIX/VIXW LMM Incentive Program
(new proposed widths are denoted with an asterisk).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expiring Near term Mid term Long term
-------------------------------------------------------------------------------------------------------
Premium level Less than 15 days 15 days to 60 days 61 days to 180 days 181 days or Greater
-------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <18
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$0.00-$1.00..................................... $0.20 30 $0.16 40 $0.20 30 $0.50 5
$1.01-$3.00..................................... 0.30 20 0.25 25 0.25 15 0.70 5
$3.01-$5.00..................................... 0.40 15 0.30 15 0.40 10 1.00 5
$5.01-$10.00.................................... 0.80 10 * 0.90 10 2.00 10 2.00 5
$10.01-$30.00................................... * 1.80 5 * 1.40 5 * 1.80 5 3.00 3
Greater than $30.00............................. * 4.50 3 * 4.50 3 * 4.50 3 5.00 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close from 18-25
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$1.00..................................... 0.30 15 0.30 30 0.30 15 1.00 5
$1.01-$3.00..................................... 0.35 10 0.35 20 0.40 10 1.00 5
$3.01-$5.00..................................... 0.50 5 0.50 15 0.60 5 1.30 5
$5.01-$10.00.................................... * 1.00 5 * 1.00 5 1.50 5 2.20 5
$10.01-$30.00................................... * 2.50 1 * 2.50 1 * 2.50 1 5.00 1
Greater than $30.00............................. * 5.00 1 * 5.00 1 * 5.00 1 * 8.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close from <ls-thn-eq>25
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$0.00-$1.00..................................... 0.80 10 0.50 10 0.60 10 1.20 5
$1.01-$3.00..................................... 1.00 10 0.75 10 1.00 10 1.20 5
$3.01-$5.00..................................... 1.20 5 0.90 10 1.20 5 1.80 5
$5.01-$10.00.................................... 2.00 5 1.50 5 2.50 5 3.00 3
$10.01-$30.00................................... * 4.00 1 * 4.00 1 * 4.00 1 * 6.00 1
Greater than $30.00............................. 10.00 1 10.00 1 10.00 1 10.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Finally, the Exchange proposes a change to the rebates offered by
the GTH VIX/VIXW LMM Incentive Program to an LMM appointed to the
program for meeting the heightened quoting standards in a given month.
The Exchange proposes to increase the rebate from $25,000 to $30,000
for the GTH VIX LMM Incentive Program, and decrease the rebate from
$10,000 to $5,000 for the GTH VIXW LMM Incentive Program.
GTH SPX/SPXW LMM Incentive Programs
The Exchange proposes to amend the GTH1 and GTH2 SPX/SPXW LMM
Incentive Programs. Currently, the GTH1 SPX/SPXW LMM Incentive Program
provides that if the appointed LMM in SPX/SPXW provides during
continuous electronic quotes during GTH from 7:15PM CST to 2:00AM CST
(``GTH1'') that meet or exceed the program's heightened quoting
standards \5\ in at least 85% of the SPX and SPXW series 90% of the
time in a given month, the LMM will receive a rebate for that month in
the amount of $25,000 (or pro-rated amount if an appointment begins
after the first trading day of the month or ends prior to the last
trading day of the month). Separately, LMM's may earn an additional
$15,000 compensation for satisfying the Mid Term (23 days to 37 days to
expiry) quoting requirements.
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\5\ Located in the ``GTH1 SPX/SPXW LMM Incentive Program'' table
in the Fees Schedule.
---------------------------------------------------------------------------
Similarly, the GTH2 SPX/SPXW LMM Incentive Program provides that if
the appointed LMM in SPX/SPXW provides during continuous electronic
quotes during GTH from 2:00AM CST to 8:25AM CST (``GTH2'') that meet or
exceed the program's heightened quoting standards \6\ in at least 85%
of the SPX and SPXW series 90% of the time in a given month, the LMM
will receive a rebate for that month in the amount of $25,000 (or pro-
rated amount if an appointment begins after the first trading day of
the month or ends prior to the last trading day of the month).
Separately, LMMs may earn an additional $15,000 compensation for
satisfying the Mid Term (23 days to 37 days to expiry) quoting
requirements
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\6\ Located in the ``GTH2 SPX/SPXW LMM Incentive Program'' table
in the Fees Schedule.
---------------------------------------------------------------------------
The Exchange proposes to adopt a new set of SPX/SPXW heightened
basic quoting standards (below) under the GTH1 SPX/SPXW LMM Incentive
[[Page 40101]]
Program (new proposed widths are denoted with an asterisk).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Expiring Near term Mid term Mid-long term Long term
---------------------------------------------------------------------------------------------------------------------------------
Premium level 7 days or less 8 days to 22 days 23 days to 37 days 38 to 180 days 181 to 500 days
---------------------------------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size Width Size
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00................................................... $0.50 15 $0.40 15 * $0.25 10 $0.60 5 $1.20 5
$5.01-$15.00.................................................. 0.70 15 0.70 15 * 0.40 10 1.50 5 2.50 5
$15.01-$50.00................................................. 1.40 10 2.00 15 * 1.60 10 2.00 5 5.00 5
$50.01-$100.00................................................ 7.00 5 4.00 10 * 2.20 5 3.50 5 6.00 5
$100.01-$200.00............................................... 18.00 1 6.00 5 3.00 5 5.00 5 8.00 5
Greater than $200.00.......................................... 24.00 1 10.00 1 10.00 1 12.00 1 50.00 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=20 and <30
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00................................................... 0.70 10 0.80 10 0.60 5 0.75 5 2.00 5
$5.01-$15.00.................................................. 1.20 10 1.10 10 1.00 5 2.40 5 3.50 5
$15.01-$50.00................................................. * 2.75 10 3.50 10 3.00 5 3.50 5 6.00 5
$50.01-$100.00................................................ * 10.00 5 * 6.00 5 5.00 5 4.00 5 8.00 5
$100.01-$200.00............................................... * 20.00 1 10.00 1 6.00 1 7.00 5 12.00 5
Greater than $200.00.......................................... 30.00 1 12.00 1 * 12.00 1 20.00 1 60.00 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=30
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$0.00-$5.00................................................... * 2.00 5 1.20 5 1.00 5 1.00 5 3.00 5
$5.01-$15.00.................................................. 3.00 5 2.70 5 2.20 5 3.00 5 5.00 5
$15.01-$50.00................................................. 5.00 5 5.50 5 4.00 5 4.00 5 8.00 5
$50.01-$100.00................................................ * 15.00 5 12.00 5 8.00 5 5.00 3 10.00 1
$100.01-$200.00............................................... 20.00 1 15.00 5 10.00 5 15.00 1 18.00 1
Greater than $200.00.......................................... 30.00 1 30.00 1 20.00 1 30.00 1 70.00 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange proposes to adopt a new set of SPX/SPXW heightened
basic quoting standards (below) under the GTH2 SPX/SPXW LMM Incentive
Program (new proposed widths are denoted with an asterisk).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expiring Near term Mid term Mid-long term Long term
-----------------------------------------------------------------------------------------------------------------------
Premium level 7 days or less 8 days to 22 days 23 days to 37 days 38 to 180 days 181 to 500 days
-----------------------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size Width Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <20
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00..................... $0.35 25 $0.40 15 * $0.25 15 $0.60 5 $1.20 5
$5.01-$15.00.................... 0.80 20 0.60 20 * 0.40 15 1.50 10 2.00 5
$15.01-$50.00................... 1.80 15 2.00 15 * 1.20 10 2.00 10 4.00 5
$50.01-$100.00.................. * 6.50 10 * 3.00 10 * 2.00 5 3.00 10 5.00 5
$100.01-$200.00................. 15.00 1 5.00 5 3.00 5 4.00 5 6.00 5
Greater than $200.00............ 20.00 1 8.00 1 8.00 1 12.00 1 50.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=20 and <30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00..................... 0.60 15 0.80 10 0.40 10 0.75 5 2.00 5
$5.01-$15.00.................... 1.00 15 1.00 15 0.80 10 2.20 5 3.00 5
$15.01-$50.00................... 2.50 10 3.50 10 3.00 5 3.00 5 5.00 5
$50.01-$100.00.................. * 9.00 10 * 6.00 10 5.00 5 3.50 5 7.00 5
$100.01-$200.00................. * 15.00 1 8.00 5 6.00 1 6.00 5 10.00 5
Greater than $200.00............ 25.00 1 12.00 1 10.00 1 20.00 1 60.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00..................... 0.90 10 1.00 10 0.80 5 1.00 5 3.00 5
$5.01-$15.00.................... 2.50 10 2.50 10 2.00 5 3.00 5 4.00 5
$15.01-$50.00................... 4.00 10 5.00 10 3.50 5 4.00 5 8.00 5
$50.01-$100.00.................. * 10.00 5 10.00 5 8.00 5 4.50 3 10.00 1
$100.01-$200.00................. 20.00 1 12.00 5 10.00 5 15.00 1 18.00 1
Greater than $200.00............ 30.00 1 25.00 1 20.00 1 30.00 1 70.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
GTH XSP LMM Incentive Programs
The Exchange proposes to amend the GTH1 and GTH2 XSP LMM Incentive
Programs. Currently, the GTH1 XSP LMM Incentive Program provides that
if the appointed LMM in XSP provides during continuous electronic
quotes during GTH1 that meet or exceed the program's heightened quoting
standards \7\ in at least 85% of each of the XSP series 90% of the time
in a given month, the LMM will receive a rebate
[[Page 40102]]
for that month in the amount of $20,000 (or pro-rated amounts if an
appointment begins after the first trading day of the month or ends
prior to the last trading day of the month) for that month.
---------------------------------------------------------------------------
\7\ Located in the ``GTH1 XSP LMM Incentive Program'' table in
the Fees Schedule.
---------------------------------------------------------------------------
The GTH2 XSP LMM Incentive Program provides that if the appointed
LMM in XSP provides during continuous electronic quotes during GTH2
that meet or exceed the program's heightened quoting standards \8\ in
at least 85% of the series 90% of the time in a given month, the LMM
will receive a payment for that month in the amount of $20,000 (or pro-
rated amount if an appointment begins after the first trading day of
the month or ends prior to the last trading day of the month) for that
month.
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\8\ Located in the ``GTH2 XSP LMM Incentive Program'' table in
the Fees Schedule.
---------------------------------------------------------------------------
The Exchange proposes to adopt a new set of heightened quoting
standards for each program. The proposed heightened quoting standards
for XSP options during GTH1 are as follows in the table below (new
proposed widths are denoted with an asterisk):
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Expiring Near term Mid term Long term
-------------------------------------------------------------------------------------------------------
Premium level 7 days or less 8 days to 60 days 61 days to 270 days 271 to 500 days
-------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <20
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... $0.08 5 $0.08 5 $0.10 5 $0.15 5
$1.01-$5.00..................................... 0.12 5 0.12 5 0.15 5 0.20 5
$5.01-$8.00..................................... 0.20 5 0.20 5 0.30 5 0.40 5
$8.01-$12.00.................................... 0.40 5 0.50 5 0.80 5 1.00 5
$12.01-$20.00................................... 0.80 5 1.00 5 1.00 5 1.50 5
Greater than $20.00............................. 1.50 5 2.00 5 2.00 5 3.00 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=20 and <30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... 0.12 5 0.12 5 0.15 5 0.20 5
$1.01-$5.00..................................... 0.15 5 0.15 5 0.20 5 0.30 5
$5.01-$8.00..................................... 0.25 5 0.25 5 0.40 5 0.70 5
$8.01-$12.00.................................... 0.60 5 0.80 5 1.10 5 1.50 5
$12.01-$20.00................................... 1.00 5 1.30 5 1.80 5 2.20 5
Greater than $20.00............................. 2.00 5 2.40 5 2.80 5 3.60 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... 0.15 5 0.16 5 0.20 5 0.30 5
$1.01-$5.00..................................... * 0.50 5 * 0.50 5 * 0.50 5 * 0.80 5
$5.01-$8.00..................................... * 0.60 5 * 0.60 5 * 0.70 5 * 1.20 5
$8.01-$12.00.................................... * 1.00 5 0.90 5 1.20 5 1.50 5
$12.01-$20.00................................... 1.20 5 1.50 5 2.00 5 2.40 5
Greater than $20.00............................. 2.40 5 2.80 5 3.20 5 4.00 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
The proposed heightened quoting standards for XSP options during
GTH2 are as follows in the table below (new proposed widths are denoted
with an asterisk):
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expiring Near term Mid term Long term
-------------------------------------------------------------------------------------------------------
Premium level 7 days or less 8 days to 60 days 61 days to 270 days 271 to 500 days
-------------------------------------------------------------------------------------------------------
Size Width Size Width Size Width Size Width
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <20
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... $0.05 5 $0.07 5 $0.08 5 $0.12 5
$1.01-$5.00..................................... 0.10 5 0.10 5 0.12 5 0.16 5
$5.01-$8.00..................................... 0.16 5 0.16 5 0.20 5 0.40 5
$8.01-$12.00.................................... 0.30 5 0.40 5 0.60 5 0.80 5
$12.01-$20.00................................... 0.80 5 0.80 5 0.80 5 1.20 5
Greater than $20.00............................. 2.00 5 2.00 5 2.00 5 3.00 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=20 and <30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... 0.10 5 0.10 5 0.12 5 0.20 5
$1.01-$5.00..................................... 0.14 5 0.15 5 0.16 5 0.30 5
$5.01-$8.00..................................... 0.20 5 0.20 5 0.30 5 0.60 5
$8.01-$12.00.................................... 0.50 5 0.70 5 1.00 5 1.30 5
$12.01-$20.00................................... 1.00 5 1.20 5 1.50 5 2.20 5
Greater than $20.00............................. 2.00 5 2.40 5 2.40 5 3.60 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 40103]]
VIX Value at Prior Close <ls-thn-eq>=30
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.01-$1.00..................................... 0.15 5 0.16 5 0.20 5 0.30 5
$1.01-$5.00..................................... * 0.30 5 * 0.30 5 * 0.40 5 * 0.60 5
$5.01-$8.00..................................... * 0.40 5 * 0.40 5 * 0.60 5 * 1.00 5
$8.01-$12.00.................................... 0.60 5 0.90 5 1.20 5 1.50 5
$12.01-$20.00................................... 1.20 5 1.50 5 2.00 5 2.40 5
Greater than $20.00............................. 2.40 5 2.80 5 3.20 5 4.00 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
RTH MBTX/MBTW LMM Incentive Program
The Exchange proposes to amend the RTH MBTX/MBTXW LMM Incentive
Program (``MBTX LMM Incentive Program''). The MBTX LMM Incentive
Program provides that if the appointed LMM provides continuous
electronic quotes during RTH that meet or exceed the program's
heightened quoting standards \9\ in at least 85% of MBTX series 85% of
the time in a given month, the LMM will receive (i) a payment for that
month in the amount of $10,000 (or pro-rated amount if an appointment
begins after the first trading day of the month or ends prior to the
last trading day of the month) for that month and (ii) a credit of
$0.25/contract applied to all MBTX contracts executed in Market-Maker
capacity during RTH.
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\9\ Located in the ``RTH MBTX/MBTXW LMM Incentive Program''
table in the Fees Schedule.
---------------------------------------------------------------------------
The Exchange proposes to adopt a new set of MBTX heightened quoting
standards (below) (new proposed widths and sizes are denoted with an
asterisk).
--------------------------------------------------------------------------------------------------------------------------------------------------------
6 days or less 7 days to 14 days 15 days to 60 days 61 to 120 days 121 to 270 days
Premium level -----------------------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size Width Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$1.00..................... * $0.05 15 * $0.10 15 * $0.10 10 $0.15 5 $0.25 5
$1.01-$3.00..................... 0.20 15 0.20 15 0.20 10 * 0.20 5 * 0.40 5
$3.01-$5.00..................... * 0.45 15 * 0.45 15 * 0.45 10 0.40 5 * 0.80 5
$5.01-$10.00.................... * 0.60 5 0.60 10 0.60 * 15 0.60 5 * 1.75 3
$10.01-$20.00................... * 1.40 1 5.00 1 6.00 * 5 * 0.90 5 * 2.40 3
$20.01-$50.00................... 8.00 1 10.00 1 10.00 * 3 8.00 1 10.00 1
Greater than $50.00............. 10.00 1 12.00 1 12.00 1 8.00 1 12.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange also proposes a change to the rebate offered by the
MBTX LMM Incentive Program to an LMM appointed to the program for
meeting the heightened quoting standards in a given month. The Exchange
proposes to decrease the rebate from $10,000 to $5,000; the credit of
$0.25/contract applied to all MBTX contracts executed in Market-Maker
capacity during RTH remains the same.
RTH CBTX/CBTXW LMM Incentive Program
The Exchange proposes to amend the RTH CBTX/CBTXW LMM Incentive
Program (``RTH CBTX LMM Incentive Program''). The CBTX LMM Incentive
Program provides that if an LMM appointed to the CBTX LMM Incentive
Program provides continuous electronic quotes during RTH that meet or
exceed the proposed heightened quoting standards \10\ in at least 85%
of CBTX series 85% of the time in a given month, the LMM will receive
(i) a payment for that month in the amount of $10,000 (or pro-rated
amount if an appointment begins after the first trading day of the
month or ends prior to the last trading day of the month) and (ii) a
credit of $0.50/contract applied to all CBTX contracts executed in
Market-Maker capacity during RTH.
---------------------------------------------------------------------------
\10\ Located in the ``RTH CBTX/CBTXW LMM Incentive Program''
table in the Fees Schedule.
---------------------------------------------------------------------------
The Exchange proposes to adopt a new set of CBTX heightened quoting
standards (below) (new proposed widths and sizes are denoted with an
asterisk).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
6 days or less 7 days to 14 days 15 days to 60 days 61 to 120 days 121 to 270 days
Premium level ---------------------------------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size Width Size
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$5.00................................................... * $2.00 * 1 * $2.00 * 1 * $2.40 * 1 * $2.50 * 1 * $3.00 * 1
$5.01-$10.00.................................................. * 2.50 * 1 * 2.50 * 1 * 2.70 * 1 * 3.00 * 1 * 5.00 * 1
$10.01-$20.00................................................. * 4.00 * 1 * $4.00 * 1 * 5.50 * 1 * 6.00 * 1 * 8.00 * 1
$20.01-$50.00................................................. * 5.00 * 1 * 5.00 * 1 * 4.50 * 1 * 7.00 * 1 * 8.00 * 1
$50.01-$100.00................................................ 6.00 1 * 6.00 * 1 * 5.50 * 1 * 8.00 * 1 * 10.00 * 1
$100.01-$200.00............................................... 12.00 1 12.00 1 * 12.00 1 * 12.00 1 * 12.00 1
Greater than $200.00.......................................... * 20.00 1 * 20.00 1 * 20.00 1 * 20.00 1 * 20.00 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
RTH SPEQX LMM Incentive Program
The Exchange proposes to amend the SPEQX LMM Incentive Program
(``SPEQX LMM Incentive Program''). The SPEQX LMM Incentive Program
provides that if an LMM appointed to the SPEQX LMM Incentive Program
provides continuous electronic quotes during RTH that meet or exceed
the
[[Page 40104]]
proposed heightened quoting standards \11\ in at least 90% of SPEQX
series 90% of the time in a given month, the LMM will receive a payment
for that month in the amount of $15,000 (or pro-rated amount if an
appointment begins after the first trading day of the month or ends
prior to the last trading day of the month) for that month.
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\11\ Located in the ``RTH SPEQX LMM Incentive Program'' table in
the Fees Schedule.
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The Exchange proposes to adopt a new set of SPEQX heightened
quoting standards (below) (new proposed widths and sizes are denoted
with an asterisk).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Expiring Near term Mid term Long term
-------------------------------------------------------------------------------------------------------
Premium level 7 days or less 8 days to 30 days 31 days to 90 days 90 to 270 days
-------------------------------------------------------------------------------------------------------
Width Size Width Size Width Size Width Size
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <=18
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$0.00-$3.00..................................... * $0.30 * 1 * $0.35 * 1 * $0.45 * 1 * $0.70 * 1
$3.01-$8.00..................................... * 0.40 * 1 * 0.60 * 1 * 0.80 * 1 * 1.10 * 1
$8.01-$15.00.................................... * 2.50 * 1 * 1.70 * 1 * 2.00 * 1 * 2.00 * 1
$15.01-$25.00................................... * 6.00 * 1 * 4.00 * 1 * 4.00 * 1 * 4.00 * 1
$25.01-$35.00................................... * 9.00 1 * 8.00 * 1 * 8.00 * 1 * 6.00 * 1
$35.01-$50.00................................... * 12.50 1 * 12.50 1 * 12.50 1 * 12.50 1
Greater than $50.00............................. * 19.00 1 * 19.00 1 * 19.00 1 * 19.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>18 and <25
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$3.00..................................... * 0.50 * 1 * 0.65 * 1 * 0.75 * 1 * 1.00 * 1
$3.01-$8.00..................................... * 0.70 * 1 * 0.90 * 1 * 1.30 * 1 * 1.60 * 1
$8.01-$15.00.................................... * 3.00 * 1 2.50 * 1 * 2.50 * 1 * 3.00 * 1
$15.01-$25.00................................... * 7.00 * 1 * 6.00 * 1 * 4.50 * 1 * 4.50 * 1
$25.01-$35.00................................... 10.00 1 10.00 1 * 9.00 1 * 7.50 1
$35.01-$50.00................................... * 15.00 1 * 15.00 1 * 15.00 1 * 15.00 1
Greater than $50.00............................. * 23.50 1 * 23.50 1 * 23.50 1 * 23.50 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
VIX Value at Prior Close <ls-thn-eq>=25
--------------------------------------------------------------------------------------------------------------------------------------------------------
$0.00-$3.00..................................... * 0.60 * 1 * 0.80 * 1 * 1.00 * 1 * 1.30 * 1
$3.01-$8.00..................................... * 1.50 * 1 * 1.80 * 1 * 2.30 * 1 * 2.50 * 1
$8.01-$15.00.................................... * 4.00 * 1 * 3.00 * 1 * 3.00 * 1 * 4.00 * 1
$15.01-$25.00................................... * 8.00 1 * 7.00 * 1 * 6.00 * 1 6.00 1
$25.01-$35.00................................... 15.00 1 15.00 1 15.00 1 10.00 1
$35.01-$50.00................................... 20.00 1 20.00 1 20.00 1 20.00 1
Greater than $50.00............................. 25.00 1 25.00 1 25.00 1 25.00 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Footnote 53
Finally, the Exchange proposes to add Footnote 53 to the Fees
Schedule to provide further clarifying information regarding the
operation of its LMM Incentive Programs. Specifically, proposed
Footnote 53 provides that, for purposes of Exchange LMM Incentive
Programs, all of an LMM's continuous electronic quotes across all
Executing Firm IDs (``EFIDs'') will be considered in calculating
whether an LMM meets the heightened quoting standards each month to
achieve rebate payments, as applicable. Proposed Footnote 53 further
provides that, in calculating whether an LMM met the heightened quoting
standard each month, the Exchange will make appropriate adjustments to
account for trading halts and abbreviated trading sessions, as
applicable. The Exchange proposes to append Footnote 53 to all of its
LMM Incentive Programs within the Fees Schedule. The proposed changes
will not result in any practical changes in calculating whether an LMM
met the heightened quoting standards each month to achieve rebate
payments under each of the LMM Incentive Programs, but rather are being
added to eliminate potential confusion.
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.\12\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ 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) \14\ 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,\15\ 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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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that it is reasonable to amend the monthly
rebate amounts applicable to the GTH VIX/VIXW options LMM Incentive
Programs and MBTX options LMM Incentive Program. The Exchange notes
that LMMs appointed to the respective
[[Page 40105]]
programs will continue to receive a monthly rebate. The Exchange
believes that the proposed rebate amounts are reasonably designed to
continue to incentivize an LMM appointed to the respective program to
meet the applicable quoting standards for VIX/VIXW and MBTX options,
thereby providing liquid and active markets, which facilitates tighter
spreads, increased trading opportunities, and overall enhanced market
quality to the benefit of all market participants.
The Exchange further believes that the proposed rule change to
amend the rebate amounts received for VIX/VIXW ($30,000 for VIX and
$5,000 for VIXW) and MBTX ($5,000) options is reasonable because they
are in line with other rebates offered through other LMM Incentive
Programs offered by the Exchange. The Exchange believes the amount of
the rebate for each LMM Incentive Program remains commensurate with the
quoting standards of each of the LMM Incentive Programs, of which some
standards are being restructured, as proposed.
Similarly, the Exchange believes that it is reasonable to amend the
heightened quoting standards under the GTH VIX, GTH SPX/SPXW, GTH XSP,
MBTX, CBTX, and SPEQX LMM Incentive Programs. The proposed quoting
standards are overall reasonably designed to continue to encourage LMMs
appointed to the incentive programs to provide significant liquidity in
these options, which benefits investors overall by providing more
trading opportunities, tighter spreads, and added market transparency
and price discovery.
The proposed changes adopt generally tighter widths for VIX, SPX/
SPXW, MBTX, and SPEQX, and larger quotes sizes for MBTX. The Exchange
believes that by adopting heightened quoting standards that provide for
tighter width and larger quote size standards, the proposed rule change
offers LMMs appointed to the programs a more challenging opportunity,
thus further incentive, to strive to meet the heightened quoting
standards in order to receive the additional rebate on their VIX, SPX/
SPXW, MBTX and SPEQX options orders. As noted above, the proposed
quoting standards are overall reasonably designed to continue to
encourage LMMs appointed to the incentive programs to provide
significant liquidity in these options, which benefits investors
overall by providing more trading opportunities, tighter spreads, and
added market transparency and price discovery.
The proposed changes also adopt generally wider widths for XSP and
CBTX and smaller quotes sizes for CBTX and SPEQX. The Exchange believes
that the proposed changes to width and quote sizes for the various
programs' heightened quoting standards, while easing the standards and
thus potentially making it easier for appointed LMMs to achieve such
requirements, continues to incentivize quoting activity in XSP, CBTX,
and SPEQX options and may possibly incentive increased quoting
activity. Particularly, by increasing certain quote widths and
deceasing certain quote sizes, the Exchange believes the proposed
changes will encourage appointed LMMs to post more aggressive quotes in
XSP, CBTX, and SPEQX options, in order to meet the heightened quoting
standards, as amended, and receive the rebates offered under the
incentive program, resulting in tighter spreads and increased liquidity
to the benefits of investors.
The Exchange also notes that the proposed heightened quoting
standards for VIX, SPX/SPXW, XSP, MBTX, CBTX, and SPEQX options do not
represent a significant departure from each of the program's current
quote width and size standards and remain generally aligned with the
current heightened standards in the programs, as the proposed width and
quote sizes are only marginally changed in order to incentivize an
increase in quoting activity.
The Exchange believes that the proposed changes to the LMM
Incentive Programs are equitable and not unfairly discriminatory.
Specifically, the changes to the LMM Incentive Program will apply
equally to any and all TPHs with LMM appointments to the VIX/VIXW, SPX/
SPXW, XSP, CBTX, MBTX, and SPEQX LMM Incentive Programs, as applicable,
that seek to meet the programs' quoting standards in order to receive
the rebates offered under each respective program. The Exchange
additionally notes that, if an LMM appointed to any of the LMM
Incentive Programs does not satisfy the corresponding heightened
quoting standard for any given month, then it simply will not receive
the rebate offered by the respective program for that month.
Regarding each of the LMM Incentive Programs generally, the
Exchange believes it is reasonable, equitable and not unfairly
discriminatory to continue to offer these financial incentives,
including as amended, to LMMs appointed to the programs, because it
benefits all market participants trading in the corresponding products
during RTH (for MBTX, CBTX, and SPEQX) and GTH (for VIX/VIXW, SPX/SPXW
and XSP). These incentive programs encourage the LMMs appointed to such
programs to satisfy the applicable quoting standards, which may
increase liquidity and provide more trading opportunities and tighter
spreads. Indeed, the Exchange notes that these LMMs serve a crucial
role in providing quotes and the opportunity for market participants to
trade VIX/VIXW, SPX/SPXW, XSP, CBTX, MBTX, and SPEQX options, as
applicable, which can lead to increased volume, providing for robust
markets. The Exchange ultimately offers the LMM Incentive Programs, as
amended, to sufficiently incentivize LMMs appointed to each incentive
program to provide key liquidity and active markets in the
corresponding program products during the corresponding trading
sessions, and believes that these incentive programs, as amended, will
continue to encourage increased quoting to add liquidity in each of the
corresponding program products, thereby protecting investors and the
public interest. The Exchange also notes that an LMM appointed to an
incentive program may undertake added costs each month to satisfy that
heightened quoting standards (e.g., having to purchase additional
logical connectivity).
Finally, the Exchange believes the proposed change to add Footnote
53 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. The proposed change clarifies
certain aspects regarding the operation of the Exchange's LMM Incentive
Programs that are in place today. Overall, the changes merely codify
these operational aspects and are intended to add clarity to the Fees
Schedule, thereby mitigating any potential confusion, to the benefit of
investors.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe the proposed rule changes regarding the LMM Incentive Programs
will impose any burden on intramarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act, because these
changes, as well as the to LMM Incentive Programs in general, will
apply to all LMMs appointed to the applicable program classes (i.e.,
VIX/VIXW, SPX/SPXW, XSP, CBTX, MBTX,
[[Page 40106]]
and SPEQX) in a uniform manner. To the extent these LMMs appointed to
an incentive program receive a benefit that other market participants
do not, as stated, these LMMs in their role as Market-Makers on the
Exchange have different obligations and are held to different
standards. For example, Market-Makers play a crucial role in providing
active and liquid markets in their appointed products, thereby
providing a robust market which benefits all market participants. Such
Market-Makers also have obligations and regulatory requirements that
other participants do not have. The Exchange also notes that an LMM
appointed to an LMM Incentive Program may undertake added costs each
month to satisfy that heightened quoting standards (e.g., having to
purchase additional logical connectivity). The Exchange also notes that
the LMM Incentive Programs are designed to attract additional order
flow to the Exchange, wherein greater liquidity benefits all market
participants by providing more trading opportunities, tighter spreads,
and added market transparency and price discovery, and signals to other
market participants to direct their order flow to those markets,
thereby contributing to robust levels of liquidity. 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.'' \16\ Additionally, 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 in calculating whether an LMM met the
heightened quoting standards each month to achieve rebate payments
under each of the LMM Incentive Programs, but rather are being added to
eliminate potential confusion.
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\16\ 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 changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as the changes
to amend certain LMM Incentive Programs apply only to transactions in
products exclusively listed on the Exchange. As noted above, the
incentive programs are designed to attract additional order flow to the
Exchange, wherein greater liquidity benefits all market participants by
providing more trading opportunities, tighter spreads, and added market
transparency and price discovery, and signals to other market
participants to direct their order flow to those markets, thereby
contributing to robust levels of liquidity. 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.
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 \17\ and paragraph (f) of Rule 19b-4 \18\
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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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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#8efcfbe2eba3ede1e3e3ebe0fafdcefdebeda0e9e1f8"><span class="__cf_email__" data-cfemail="285a5d444d054b4745454d465c5b685b4d4b064f475e">[email protected]</span></a>. Please include
file number SR-CBOE-2025-057 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-2025-057. 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 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-2025-057 and should be submitted on
or before September 8, 2025.
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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-15622 Filed 8-15-25; 8:45 am]
BILLING CODE 8011-01-P
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