Notice2025-20538
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7.22 of the Exchange's CAT Compliance Rule
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
November 21, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 223 (Friday, November 21, 2025)</title>
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[Federal Register Volume 90, Number 223 (Friday, November 21, 2025)]
[Notices]
[Pages 52716-52718]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20538]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104217; File No. SR-CBOE-2025-073]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 7.22 of the Exchange's CAT Compliance Rule
November 18, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 29, 2025, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II 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 Rule 7.22 of the Exchange's Consolidated Audit Trail
Compliance Rule (``CAT Compliance Rule'') regarding the National Market
System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan'' or ``Plan'') \3\ to be consistent with the amendment to the CAT
NMS Plan that requires broker-dealers with a reporting obligation to
the Consolidated Audit Trail (``CAT'') to report whether an original
receipt or origination of an order to sell an equity security is a
short sale for which a market maker is claiming the bona fide market
making exception in Rule 203(b)(2)(iii) of Regulation SHO (``BFMM
Locate Exception'').\4\ The text of the proposed rule change is
provided in Exhibit 5.
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\3\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth in the CAT Compliance Rule. See
Chapter 7, Section B of the Exchange's Rulebook.
\4\ See Securities Exchange Act Release Nos. 98738 (October 13,
2023), 88 FR 75100 (November 1, 2023); and 98739 (October 13, 2023),
88 FR 75079 (November 1, 2023).
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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.
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 purpose of this proposed rule change is to amend Rule 7.22 of
the CAT Compliance Rule to be consistent with the amendment to the CAT
NMS Plan related to the BFMM Locate Exception. In 2023, the Securities
and Exchange Commission (the ``Commission'') amended the CAT NMS Plan
to require the reporting to the CAT of reliance on the BFMM Locate
Exception.\5\ Specifically, the Commission added paragraph (D) to
Section 6.4(d)(ii) of the CAT NMS Plan, which requires each
Participant, through its Compliance Rule, to require its Industry
Members to record and report to the Central Repository the following:
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\5\ Id.
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
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Regulation SHO is claimed.
Accordingly, the Exchange proposes to amend its CAT Compliance Rule to
reflect this additional CAT reporting requirement. Specifically, the
Exchange proposes to add subparagraph (G) to Rule 7.22(a)(2), which
would require each Industry Member to record and report to the Central
Repository the following:
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
Regulation SHO is claimed.
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
[[Page 52717]]
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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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The Exchange believes that this proposal is consistent with the Act
because it is consistent with the amendment to the CAT NMS Plan
approved by the Commission and is designed to assist the Exchange and
its Industry Members in meeting regulatory obligations pursuant to the
Plan. In approving the Plan, the SEC noted that the Plan ``is necessary
and appropriate in the public interest, for the protection of investors
and the maintenance of fair and orderly markets, to remove impediments
to, and perfect the mechanism of a national market system, or is
otherwise in furtherance of the purposes of the Act.'' \9\ To the
extent that this proposal implements the Plan as amended, and applies
specific requirements to Industry Members, the Exchange believes that
this proposal furthers the objectives of the Plan, as identified by the
SEC, and is therefore consistent with the Exchange Act.
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\9\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696, 84697 (November 23, 2016).
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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
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Exchange Act. The
Exchange notes that the proposed rule change is consistent with the
amendment to the CAT NMS Plan approved by the Commission and is
designed to assist the Exchange in meeting its regulatory obligations
pursuant to the Plan. The Exchange also notes that the amendment to the
CAT Compliance Rule will apply equally to all Industry Members that
trade equity securities. In addition, all national securities exchanges
and FINRA are proposing these amendments to their CAT Compliance Rules.
Therefore, this is not a competitive rule filing, and, therefore, it
does not impose a burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission believes that waiving 30-day operative delay is consistent
with the protection of investors and the public interest because the
proposal seeks to amend the Exchange's CAT Compliance Rule to reflect
the requirement in the CAT NMS Plan that industry members report for
the original receipt or origination of an order to sell an equity
security, whether the order is for a short sale effected by a market
maker in connection with bona fide market making activities in the
security for which the exception in Rule 203(b)(2)(iii) of Regulation
SHO is claimed.\14\ The proposal does not introduce any novel
regulatory issues. Accordingly, the Commission designates the proposed
rule change to be operative upon filing.\15\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ See supra note 4.
\15\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<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#0173746d642c626e6c6c646f7572417264622f666e77"><span class="__cf_email__" data-cfemail="aedcdbc2cb83cdc1c3c3cbc0daddeeddcbcd80c9c1d8">[email protected]</span></a>. Please include
file number SR-CBOE-2025-073 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-2025-073. 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
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protection. All submissions should refer to file number SR-CBOE-2025-
073 and should be submitted on or before December 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-20538 Filed 11-20-25; 8:45 am]
BILLING CODE 8011-01-P
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