Notice2025-16701
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To Eliminate Position and Exercise Limits for Options on the S&P 500 Equal Weight Index
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
September 2, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 167 (Tuesday, September 2, 2025)</title>
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[Federal Register Volume 90, Number 167 (Tuesday, September 2, 2025)]
[Notices]
[Pages 42464-42468]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-16701]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103782; File No. SR-CBOE-2025-020]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 2, To Eliminate
Position and Exercise Limits for Options on the S&P 500 Equal Weight
Index
August 27, 2025.
I. Introduction
On March 14, 2025, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities
Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a
proposed rule change to eliminate position and exercise limits for
options that overlie the S&P 500 Equal Weight Index (based on both the
full value (``SPEQF options'') and one-tenth the value (``SPEQX
options'') of the index). The proposed rule change was published for
comment in the Federal Register on March 31, 2025.\4\ On May 9, 2025,
pursuant to Section 19(b)(2) of the Act,\5\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\6\ On June
26, 2025, the Commission instituted proceedings under Section
19(b)(2)(B) of the Act \7\ to determine whether to approve or
disapprove the proposed rule change.\8\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ See Securities Exchange Act Release No. 102720 (March 25,
2025), 90 FR 14297 (``Notice''). The initial proposed rule change
also would have eliminated position and exercise limits for options
that overlie the S&P 500 Scored and Screened Index (formerly known
as the S&P 500 ESG Index) (``SPESG options''). As described below,
the Exchange removed this aspect of the proposal in Amendment Nos. 1
and 2. See infra note 9.
\5\ See 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 103017, 90 FR 14297
(May 15, 2025). The Commission designated June 30, 2025, as the date
by which the Commission shall approve or disapprove, or institute
proceedings to determine whether to disapprove, the proposed rule
change.
\7\ 15 U.S.C. 78s(b)(2)(B).
\8\ See Securities Exchange Act Release No. 103338, 90 FR 28846
(July 1, 2025) (``OIP'').
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On July 7, 2025, the Exchange filed Amendment No. 1 to the proposed
rule change; on July 23, 2025, the Exchange withdrew Amendment No. 1
and replaced it with Amendment No. 2.\9\ The Commission received no
comments on the proposed rule change. The Commission is publishing this
Notice and Order to solicit comment on Amendment No. 2 in Sections II
and III below, which sections are being published verbatim as filed by
the Exchange, and to approve the proposed rule change, as modified and
superseded by Amendment No. 2, on an accelerated basis.
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\9\ Amendment Nos. 1 and 2 are publicly available on the
Commission's website at <a href="https://www.sec.gov/comments/sr-cboe-2025-020/srcboe2025020.htm">https://www.sec.gov/comments/sr-cboe-2025-020/srcboe2025020.htm</a>. Amendment No. 1 superseded and replaced the
initial proposal; it removed SPESG options from the scope of the
proposed rule change and provided additional support for and detail
regarding what remained in the proposed rule change, namely, the
proposed removal of position and exercise limits for SPEQF and SPEQX
options. The exchange withdrew Amendment No. 1 due to a technical
error in the Exhibit 1. Amendment No. 2 supersedes and replaces the
initial filing and Amendment No. 1. In Amendment No. 2, the Exchange
corrected that technical error in the Exhibit 1 of Amendment No. 1
but otherwise retained what was set forth in Amendment No. 1 without
making any substantive changes to the initial filing other than
those that were set forth in Amendment No. 1.
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II. 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 the position and exercise limits for options that overlie the
S&P 500 Equal Weight Index (based on both the full value and one-tenth
the value of the index) (``SPEQF options'' and ``SPEQX options,''
respectively). 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="http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx">http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx</a>) and at the Exchange's Office of the
Secretary.
III. 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 V 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 purpose of this proposed rule change is to amend the position
and exercise limits for SPEQF options and SPEQX options. Pursuant to
Rule 8.31(a), the current position limit for each of these three
options is 25,000 contracts.\10\ Pursuant to Rule 8.42(b), the exercise
limit for each of these options is equivalent to its position limit and
thus is also 25,000 contracts. With respect to flexible exchange
options (``FLEX options''), Rule 8.35(a)(2) provides that the position
limits for FLEX SPEQF and SPEQX options are 200,000 contracts, and Rule
8.42(g) provides that the exercise limits are also 200,000 contracts.
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\10\ Positions (and exercises) are further limited to 15,000
near-term contracts. See Rule 8.31(a).
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The proposed rule change amends Rules 8.31(a) and 8.35(b) to
eliminate the position and exercise limits for each of SPEQF and SPEQX
options (including FLEX options). This would also eliminate the
exercise limits for these options pursuant to Rule 8.42(b) and (g).
There are currently no position or exercise limits for many other
broad-based index options (including FLEX), including SPX and XSP
options. The underlying index of SPX and XSP options (the S&P 500
Index) is comprised of the same components as SPEQF and SPEQX options.
In addition, the Exchange notes that other S&P 500 Index-related
options (e.g., S&P 500 Dividend Index) have no position or exercise
limits. FLEX SPEQF and SPEQX options will be subject to the same
reporting requirements triggered for other FLEX options traded on the
Exchange.\11\ Given the relationship between the S&P 500 Equal Weight
Index and the S&P 500 Index, the Exchange understands that market
participants' investment and hedging strategies may consist of options
overlying any or all of these options. As a result, the Exchange
believes it is appropriate for these options to all be subject to the
same position and exercise limits to provide them with the ability to
execute these strategies with sufficient flexibility and in a
consistent manner.
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\11\ See Rule 8.35(b).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange
[[Page 42465]]
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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
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In particular, the Exchange believes the proposed rule change will
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, protect investors and the public
interest, because it is consistent with existing rules regarding
position and exercise limits for many broad-based index options
currently authorized for listing and trading on the Exchange. There are
currently no position limits for related options that overlay the S&P
500 Index, the components of which are the same as those of the S&P 500
Equal Weight Index. Because of this relationship between the S&P 500
Equal Weight Index and the S&P 500 Index, options on all of which
market participants may use as hedging vehicles to meet their
investment needs in connection with S&P 500 Index-related products and
cash positions, the Exchange believes the proposed rule change will
benefit investors, as it will permit market participants to use these
options in accordance with consistent rules with respect to their
investment and hedging strategies.
Despite the overlapping constituents of the indexes underlying SPX
options and SPEQF and SPEQX options, these options provide investors
with important alternate investment opportunities. With respect to
SPEQF and SPEQX options, the U.S. equity markets have experienced
increased levels of concentration in recent years. SPEQF and SPEQX
options provide market participants with alternative tools to manage
their risk and diversify their exposure to the stocks comprising the
S&P 500 Index by permitting them to gain broad exposure to these stocks
using options that would be less impacted by a shift in concentration
and market momentum. Because capitalization-weighted indexes such as
the S&P 500 Index are more impacted by larger capitalized stocks,
options overlying an equal-weighted index (such as the S&P 500 Equal
Weight Index) would benefit investors by permitting them to hedge
against potential swings in the largest stocks comprising the S&P 500
Index while maintaining the ability to hedge across the entire span of
S&P 500 constituent securities. Because the components of the S&P 500
Equal Weight Index are the same as the components of the S&P 500 Index,
market participants may use options overlying these indexes as a
hedging vehicle to meet their investment needs in connection with S&P
500-related products and cash positions, and, therefore, the Exchange
believes it is appropriate to provide generally consistent features
between options on these indexes, as that ultimately will remove
impediments to and perfect the mechanism of a free and open market and
a national market system. The Exchange believes imposing lower position
and exercise position limits on SPEQF and SPEQX options may
unnecessarily restrict investors' abilities to use these options to
achieve their investment goals.
The Exchange believes the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices and to promote
just and equitable principles of trade. The S&P 500 Equal Weight Index,
like the S&P 500 Index, is comprised of the 500 largest capitalized
stocks listed on U.S. securities exchanges. These stocks cover
approximately 80% of the total U.S. stock market capitalization. The
Exchange believes the deep, liquid markets for these large-
capitalization stocks reduces concerns of market manipulation or impact
on the underlying markets. Despite the difference in weighting of the
constituents in the S&P 500 Equal Weight Index (each constituent would
be approximately 0.2%) compared to the weight of the constituents in
the S&P 500 Index (constituent weightings currently range from 0.01% to
just under 7%), it would be difficult for investors to manipulate the
index value of the S&P Equal Weight Index. Doing so would require
investors to influence the value of a large number of constituent
stocks to impact the value of the index, which the Exchange believes
would be prohibitively expensive to do so, even for the less liquid
constituents. Similarly, even the least liquid constituents in the S&P
500 Equal Weight Index are still amongst the most liquid and largest
capitalized stocks in the United Stated, making it unlikely those
markets could be materially impacted by increased options trading.
Therefore, the Exchange does not believe the elimination of position
(and exercise) limits for SPEQF and SPEQX options will increase the
risk of manipulation of the index value or impact the markets for the
underlying constituents.
If the Commission approves the proposed rule change, the reporting
requirements for SPEQF and SPEQX options would remain unchanged.
Specifically, the Exchange's requirement that TPHs file reports with
the Exchange for any customer who held aggregate large long or short
positions on the same side of the market of 200 or more option
contracts of any single class for the previous day will remain at this
level for the options subject to this proposal and will continue to
serve as an important part of the Exchange's surveillance efforts.\15\
While SPEQX and SPEQF options are not subject to the hedged position
reporting requirement in Rule 8.43(b),\16\ the Exchange may access this
position information from TPH.\17\
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\15\ See Rule 8.43(a).
\16\ Rule 8.43(b) applies only to non-FLEX equity options.
\17\ The Options Clearing Corporation (``OCC'') through the
Large Option Position Reporting (``LOPR'') system acts as a
centralized service provider for TPH compliance with position
reporting requirements by collecting data from each TPH or TPH
organization, consolidating the information, and ultimately
providing detailed listings of each TPH's report to the Exchange, as
well as Financial Industry Regulatory Authority, Inc. (``FINRA''),
acting as its agent pursuant to a regulatory services agreement
(``RSA'').
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The Exchange believes that the existing surveillance procedures and
reporting requirements at the Exchange and other SROs are capable of
properly identifying disruptive and/or manipulative trading activity.
The Exchange also represents that it has adequate surveillances in
place to detect potential manipulation, as well as reviews in place to
identify potential changes in composition of the S&P 500 Equal Weight
Index and continued compliance with the Exchange's listing standards.
These procedures utilize daily monitoring of market activity via
automated surveillance techniques to identify unusual activity in both
options and the underlying index, as
[[Page 42466]]
applicable.\18\ The Exchange also notes that large stock holdings must
be disclosed to the Commission by way of Schedules 13D or 13G,\19\
which are used to report ownership of stock which exceeds 5% of a
company's total stock issue and may assist in providing information in
monitoring for any potential manipulative schemes.
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\18\ The Exchange believes these procedures have been effective
for the surveillance of trading the options subject to this proposal
and will continue to employ them.
\19\ 17 CFR 240.13d-1.
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The Exchange believes that the current financial requirements
imposed by the Exchange and by the Commission adequately address
concerns regarding potentially large, unhedged positions in SPEQX and
SPEQF options. Current margin and risk-based haircut methodologies
serve to limit the size of positions maintained by any one account by
increasing the margin and/or capital that a TPH must maintain for a
large position held by itself or by its customer.\20\ In addition, Rule
15c3-1 \21\ imposes a capital charge on TPHs to the extent of any
margin deficiency resulting from the higher margin requirement.
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\20\ See Chapter 10 of the Exchange's rulebook, including Rule
10.3, for a description of margin requirements.
\21\ 17 CFR 240.15c3-1.
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When approving the Exchange's proposed rule change to eliminate
position limits for SPX options, the Commission noted it believed
``that the enormous capitalization of and deep, liquid markets for the
underlying securities contained in these indexes significantly reduces
concerns regarding market manipulation or disruption in the underlying
market.'' \22\ The Commission continued, stating that ``[r]emoving
position and exercise limits for these index options may also bring
additional depth and liquidity, in terms of both volume and open
interest, to [SPX options] without significantly increasing concerns
regarding intermarket manipulations or disruptions of the options or
the underlying securities.'' \23\ This finding would apply to the S&P
500 Equal Weight Index, and thus SPEQF and SPEQX options, given that it
is comprised of the same components as the S&P 500 Index underlying SPX
options. The Commission further found that: (1) eliminating position
and exercise limits for SPX options would better service the hedging
needs of institutions; (2) financial requirements imposed by the
Exchange and the Commission adequately address concerns that a Cboe
member or customer may try to maintain an inordinately large unhedged
SPX option position; (3) index derivatives are not subject to position
and exercise limits in the over-the-counter market; and (4) the
Exchange surveillance reporting safeguards would allow it to detect and
deter trading abuses arising from the elimination of position and
exercise limits for SPX options.\24\ The Exchange believes these same
principles apply to supporting no position or exercise limits for SPEQF
and SPEQX, particularly given the exact overlap of constituents for the
S&P 500 Index and the S&P 500 Equal Weight Index.
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\22\ See Securities Exchange Act Release No. 40969 (January 22,
1999), 64 FR 4911, 4913 (February 1, 1999) (SR-CBOE-98-23). As of
January 8, 2025, the total market capitalization of the S&P 500
Index was $49.788 trillion (which is nearly six times more than the
market capitalization of the S&P 500 Index in 1999, when the
Commission approved the elimination of position and exercise limits
for SPX options). Additionally, the average daily trading volume for
the underlying components of the S&P 500 Index for the six months
preceding January 8, 2025 was approximately 2.7 billion shares
(compared to 757.7 million in 1999). Given that the S&P 500 Equal
Weight Index is comprised of the same constituents as the S&P 500
Index, the S&P 500 Equal Weight Index would have the same market
capitalization, and the underlying components would have the same
average trading volume, as the S&P 500 Index, which demonstrates the
``substantial liquidity of the index components as a group.'' Id.
\23\ Id.
\24\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe the proposed rule change will impose any burden on intramarket
competition that is not necessary in furtherance of the purposes of the
Act, because it will apply to all market participants in the same
manner. Additionally, the Exchange does not believe this proposed rule
change will impose any burden on intermarket competition that is not
necessary in furtherance of the purposes of the Act, because the Rules
currently impose no position or exercise limits on many other broad-
based index options, including SPX and XSP options, which overlie an
index comprised of the same constituents. Additionally, the rules of
other options exchange provide that other broad-based index options
will not be subject to any position or exercise limits.\25\
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\25\ See, e.g., Nasdaq PHLX LLC Options 4A, Section 6(a)(i)
(which provides there are no position limits for Full Value Nasdaq
100 Options, the Reduced Value Nasdaq 100 Options, the Nasdaq 100-
Micro Index Options, and the Nasdaq-100 ESG Index Options).
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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 written comments on the
proposed rule change.
IV. Discussion and Commission Findings
After careful review, the Commission finds that the Exchange's
proposed rule change, as modified and superseded by Amendment No. 2
(``Amended Proposal''), is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities exchange.\26\ In particular, the Commission finds that the
Amended Proposal is consistent with Section 6(b)(5) of the Act,\27\
which requires, among other things, that an exchange have rules
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, 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.
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\26\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\27\ 15 U.S.C. 78f(b)(5).
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As stated above, for SPEQF and SPEQX options, the current position
and exercise limit is 25,000 contracts for standardized positions and
200,000 contracts for FLEX positions. Under the Amended Proposal, these
limits would be eliminated such that standardized and FLEX SPEQF and
SPEQX options have no position or exercise limits. As the Commission
stated in the OIP, the proposed elimination of position (and exercise)
limits would permit market participants to significantly increase the
size of unidirectional, unhedged positions in these products, and
raises the potential for adverse market impacts and manipulative
schemes.\28\ The Commission also stated, in the OIP, that the initial
filing did not address the potential risks of adverse market impact or
manipulation that could be presented by the equal weighting of the
underlying index components for SPEQF and SPEQX options, which is
different from the market capitalization weighting applied to the
underlying index components for SPX and XSP options.\29\
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\28\ See OIP, supra note 8, 90 FR at 28847.
\29\ Id. The Commission also expressed concern in the OIP
regarding the initial filing's proposed elimination of position and
exercise limits for SPESG options, but the Amended Proposal removes
that aspect of the initial filing, and thus it is not considered by
the Commission in this order.
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[[Page 42467]]
Position and exercise limits serve as a regulatory tool designed to
deter manipulative schemes and adverse market impact surrounding the
use of options by preventing the establishment of options positions
that can be used or might create incentives to manipulate the
underlying market so as to benefit the options positions, or that might
contribute to disruptions in the underlying market.\30\ In addition,
such limits serve to reduce the possibility of disruption in the
options market itself, especially in illiquid classes.\31\ The
Commission traditionally has balanced two competing concerns when
considering the appropriate level at which to set option position and
exercise limits. The Commission has recognized that the limits must be
sufficient to prevent investors from disrupting the market in the
component securities comprising the indexes.\32\ At the same time, the
Commission has determined that limits should not be established at
levels that are so low as to discourage participation in the options
market by institutions and other investors with substantial hedging
needs or to prevent specialists and market-makers from adequately
meeting their obligations to maintain a fair and orderly market.\33\
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\30\ See, e.g., Securities Exchange Act Release No. 40969
(January 22, 1999), 64 FR 4911 (February 1, 1999) (SR-CBOE-1998-23).
\31\ Id.
\32\ Id.
\33\ Id.
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The components of the S&P 500 Equal Weight Index that underlie
SPEQF and SPEQX options are the same as the components of the S&P 500
Index that underlie SPX and XSP options,\34\ and there are no position
or exercise limits for standardized or FLEX positions in SPX and XSP
options.\35\ Because the components of the S&P 500 Equal Weight Index
are the same as the components of the S&P 500 Index, market
participants may use options overlying both of these indexes as a
hedging vehicle to meet their investment needs in connection with S&P
500-related products and cash positions. It is appropriate to provide
generally consistent features between options on these indexes, and
imposing lower position and exercise limits on SPEQF and SPEQX options
than those that apply to SPX and XSP options may unnecessarily restrict
investors' abilities to use these options to achieve their investment
goals.
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\34\ See Section III, supra. The Exchange also states that, as
of January 8, 2025, the total market capitalization of the S&P 500
Index was $49.788 trillion, and the average daily trading volume for
its underlying components for the six months preceding January 8,
2025, was 2.7 billion shares. According to the Exchange, this
demonstrates that there is substantial liquidity in the components
of the S&P 500 Equal Weight Index since its components are the same
as the S&P 500 Index. See note 22 and accompanying text, supra.
\35\ See Section III, supra; see also Exchange Rules 8.31 and
8.42. There also are no position or exercise limits for S&P 500
Dividend Index options, which are another type of broad-based index
option that trades on the Exchange. Id. Moreover, other exchanges
offer broad-based index options without position or exercise limits.
See, e.g., note 25, supra.
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At the same time, the potential for manipulation or market
disruption stemming from inordinately large, unhedged positions in
SPEQF or SPEQX options is mitigated. The S&P 500 Equal Weight Index
consists of 500 of the most highly capitalized U.S.-listed
companies.\36\ The large number of underlying securities contained in
the S&P 500 Equal Weight Index as well as their enormous capitalization
and deep, liquid markets significantly reduces concerns regarding the
potential for market manipulation or disruption in the market
underlying SPEQF and SPEQX options. This is the case, in the
Commission's view, notwithstanding the equal weighting applied to the
component securities of the S&P 500 Equal Weight Index, as even the
least liquid constituents in the S&P 500 Equal Weight Index are still
among the most liquid and largest capitalized stocks in the United
States. In addition, as set forth above, various requirements already
exist that should enable the Exchange to guard against the potential
for manipulation or adverse market impact stemming from large, unhedged
SPEQF or SPEQX option positions.\37\ These include TPH reporting
requirements for large option positions,\38\ as well as financial
requirements imposed by the Exchange and the Commission.\39\
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\36\ See note 22, supra.
\37\ See Section III, supra.
\38\ See note 15, supra, and accompanying text. For example,
pursuant to Exchange Rule 8.43(a), TPHs must file a report with the
Exchange that identifies any customer who, acting alone or in
concert with others, on the previous business day maintained
aggregate long or short positions on the same side of the market of
200 or more option contracts of any single class of option contracts
dealt in on the Exchange. The Exchange also may access additional
option position information, such as regarding hedged positions,
from TPHs. See note 17 and accompanying text, supra.
\39\ See notes 20 and 21 and accompanying text, supra.
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Further, the potential risks of trading SPEQF and SPEQX options
without position and exercise limits are mitigated by the Exchange's
and other SROs' surveillance mechanisms.\40\ The Exchange represents
that it has in place adequate surveillances to detect potential
manipulation, as well as reviews to identify potential changes in
composition of the S&P 500 Equal Weight Index and continued compliance
with the Exchange's listing standards.\41\ According to the Exchange,
these procedures utilize daily monitoring of market activity via
automated surveillance techniques to identify unusual activity in both
options and the underlying index, as applicable.\42\ The Commission
expects that the Exchange will continue to monitor trading in SPEQF and
SPEQX options for the purpose of discovering and sanctioning
manipulative acts and practices, and will reassess whether to apply
position and exercise limits to SPEQF and SPEQX, if and when
appropriate, in light of its findings.
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\40\ See note 17 and accompanying text, supra.
\41\ See Section III, supra.
\42\ Id.
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In light of the foregoing, the Commission believes that the Amended
Proposal is consistent with Section 6(b)(5) of the Act.\43\
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\43\ 15 U.S.C. 78f(b)(5).
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V. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 2 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#592b2c353c743a3634343c372d2a192a3c3a773e362f"><span class="__cf_email__" data-cfemail="addfd8c1c880cec2c0c0c8c3d9deeddec8ce83cac2db">[email protected]</span></a>. Please include
file number SR-CBOE-2025-020 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-2025-020 on the
subject line. 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
[[Page 42468]]
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-2025-020 on the subject line, and should
be submitted on or before September 23, 2025.
VI. Accelerated Approval of Proposed Rule Change, as Modified and
Superseded by Amendment No. 2
The Commission finds good cause to approve the Amended Proposal
prior to the 30th day after the date of publication of Amendment No. 2
in the Federal Register. Amendment No. 2 narrows the scope of the
initial proposed rule change by removing the initially proposed
elimination of position and exercise limits for SPESG options.
Amendment No. 2 also sets forth additional support and detail regarding
the aspect of the initial proposed rule change that remains in the
Amended Proposal, namely, the elimination of position and exercise
limits for SPEQF and SPEQX options. In addition, the original filing
has been subject to public comment and no comments have been received.
Thus, the Commission finds that Amendment No. 2 raises no novel
regulatory issues that have not previously been subject to comment, and
is reasonably designed, among other things, to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. Accordingly, pursuant to Section 19(b)(2) of the
Act,\44\ the Commission finds good cause to approve the Amended
Proposal on an accelerated basis prior to the 30th day after
publication of notice of the filing of Amendment No. 2 in the Federal
Register.
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\44\ 15 U.S.C. 78s(b)(2).
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VII. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\45\ that the proposed rule change (SR-CBOE-2025-020), as modified
and superseded by Amendment No. 2, be, and hereby is, approved on an
accelerated basis.
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\45\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
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\46\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-16701 Filed 8-29-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 2, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.