Notice2025-22148
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule
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
December 8, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 233 (Monday, December 8, 2025)</title>
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[Federal Register Volume 90, Number 233 (Monday, December 8, 2025)]
[Notices]
[Pages 56814-56820]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22148]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104298; File No. SR-CboeBZX-2025-148]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
December 3, 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 November 20, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') 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
The Exchange proposes to amend its Fees Schedule to adopt twelve
new fee codes and three volume-based tier incentive programs in
connection with the implementation of the Exchange's new Complex order
functionality. The text of the proposed rule change is provided in
Exhibit 5. The text of the proposed rule change is also available on
the Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/equities/regulation/rule_filings/bzx/">https://www.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to modify its Fees Schedule to adopt fees in
connection with its handling of Complex orders.\3\
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\3\ The Exchange introduced complex order handling effective
October 13, 2025; see Securities Exchange Act Release No. 104000
(September 18, 2025), 90 FR 45819 (September 23, 2025) (SR-CboeBZX-
2025-126). The Exchange initially filed the proposed fee changes on
September 26, 2025 (SR-CboeBZX-2025-136). On November 20, 2025, the
Exchange withdrew that filing and submitted SR-CboeBZX-2025-147. On
November 20, 2025, the Exchange withdrew that filing and submitted
this filing.
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The Exchange proposes to adopt twelve new fee codes in connection
with this new Complex order functionality, which will be added to the
Fee Codes and Associated Fees table of the Fees Schedule. These fee
codes represent the fees applicable to Complex orders, as described
below. In addition, the Exchange proposes to adopt three new volume-
based tier incentive programs, which will be added to Footnotes 10, 11,
and 12, as described below.
Fee Codes Changes
Customer Pricing for Transactions on Complex Order Book
The Exchange proposes to adopt three fee codes for Customer \4\
Complex orders that trade on the BZX Options complex order book
(``COB'') (i.e., fee codes ZA, ZB, and ZC). As proposed, the Exchange
[[Page 56815]]
will apply fee code ZA to Customer Complex orders that are executed on
the COB with a Non-Customer \5\ as the contra-party in Penny Program
Securities \6\ and will provide such orders a rebate of $0.40 per
contract. The Exchange will apply fee code ZB to Customer Complex
orders that are executed on the COB with a Non-Customer as the contra-
party in Non-Penny Program Securities \7\ and will provide such orders
a rebate of $0.80 per contract. The Exchange will apply fee code ZC to
Customer Complex orders that are executed on the COB with another
Customer as the contra-party and will not assess a fee or provide any
rebate for such orders; there is no proposed distinction between
pricing for such orders in Penny Program Securities and Non-Penny
Program Securities.
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\4\ ``Customer'' applies to any order for the account of a
Priority Customer. See the Exchange's Fee Schedule available at:
<a href="https://www.cboe.com/us/options/membership/fee_schedule/bzx/">https://www.cboe.com/us/options/membership/fee_schedule/bzx/</a>.
\5\ ``Non-Customer'' applies to any transaction that is not a
Customer order. Id.
\6\ ``Penny Program Securities'' are those issues quoted
pursuant to Exchange Rule 21.5(d). Id.
\7\ The term ``Non-Penny Pilot Security'' applies to those
issues that are not Penny Program Securities quoted pursuant to
Exchange Rule 21.5(d).
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Complex Order Legs Into Simple Book
As described in Rule 21.18, which will become operative in
connection with the Exchange's implementation of its complex order
functionality,\8\ in addition to complex orders executing against other
complex orders on the COB, complex orders will, in certain
circumstances instead ``leg'' into the BZX Options Simple Book \9\ and
execute against interest resting on the Simple Book. The Exchange
proposes to adopt three fee codes for complex order legs into the
Simple Book (i.e., fee codes ZD, ZO, ZP). As proposed, the Exchange
will apply fee code ZD to Customer Complex orders that are not executed
on the COB but instead leg into the Simple Book and will not assess a
fee or provide any rebate for such orders. The Exchange will apply fee
code ZO to Non-Customer Complex orders in Penny Program Securities that
are not executed on the COB but instead leg into the Simple Book and
will not assess a fee or provide any rebate for such orders. The
Exchange will apply fee code ZP to Non-Customer Complex orders in Non-
Penny Program Securities that are not executed on the COB but instead
leg into the Simple Book and will not assess a fee or provide any
rebate for such orders.
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\8\ See Securities Exchange Act Release No. 104000 (September
18, 2025), 90 FR 45819 (September 23, 2025) (SR-CboeBZX-2025-126).
\9\ The term ``Simple Book'' means the electronic book of simple
options orders maintained by the Trading System. See Rule 16.1.
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Complex Trades at the Open and Simple Order Trades With Complex Order
The Exchange proposes to adopt fee codes OC and ZE. As proposed,
the Exchange will apply fee code OC to Complex orders that trade at the
open and will not assess a fee or provide any rebate for such orders.
The Exchange will apply fee code ZE to Simple order trades with a
Complex order and will not assess a fee or provide any rebate for such
orders.
Non-Customer Pricing--Non-Customer as Contra-Party
Finally, the Exchange proposes to adopt four fee codes to cover all
Complex order transactions between Non-Customers on the COB (i.e., fee
codes ZF, ZG, ZH, and ZJ). As proposed, the Exchange would apply fee
code ZF to Non-Customer Complex orders executed on the COB that add
liquidity in Penny Program Securities and would charge such orders a
fee of $0.50 per contract. The Exchange will apply fee code ZG to Non-
Customer Complex orders executed on the COB that remove liquidity in
Penny Program Securities and would charge such orders a fee of $0.50
per contract. The Exchange will apply fee code ZH to Non-Customer
complex orders executed on the COB that add liquidity in Non-Penny
Program Securities and would charge such orders a fee of $0.90 per
contract. Last, the Exchange would apply fee code ZJ to Non-Customer
complex orders executed on the COB that remove liquidity in Non-Penny
Program Securities and will charge such orders a fee of $0.90 per
contract.
New Volume Tier Programs
As discussed above, in addition to setting forth the proposed fees
and rebates in the Fee Codes and Associated Fees table, the Exchange
proposes to amend Footnotes 10, 11, and 12 and adopt three volume-based
tier incentive programs.\10\
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\10\ Currently, Footnotes 10, 11, and 12 are marked as
``Reserved''; the proposed change deletes the Reserved language.
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First, the Exchange proposes to adopt Complex order Customer
(contra Non-Customer) Penny Volume Tiers, applicable to qualifying
Complex Customer (contra Non-Customer) orders in Penny Program
Securities yielding fee code ZA, to Footnote 10 of the Fee
Schedule.\11\ Under the proposed Complex order Customer (contra Non-
Customer) Penny Volume Tiers, the Exchange proposes to offer three
tiers. The specific tiers and corresponding rebates, as proposed, are
as follows:
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\11\ The Exchange proposes to append a reference to Footnote 10
to fee code ZA within the Fee Codes and Associated Fees table.
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<bullet> Tier 1 provides a rebate of $0.43 per contract for all
qualifying orders yielding fee code ZA (i.e., Customer contra Non-
Customer complex orders in Penny Program Securities), where a Member
has an ADV \12\ in Complex Customer orders >= 0.10% of average OCV;
\13\
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\12\ ``ADV'' means average daily volume calculated as the number
of contracts added or removed, combined, per day.
\13\ ``OCC Customer Volume'' or ``OCV'' means the total equity
and ETF options volume that clears in the Customer range at the
Options Clearing Corporation (``OCC'') for the month for which the
fees apply, excluding volume on any day that the Exchange
experiences an Exchange System Disruption and on any day with a
scheduled early market close. Average OCV is the average daily OCV
for the month (i.e., total OCV divided by the number of trading days
in the month); for example, in a month with 20 trading days, if OCV
is 1,040,000,000, the average OCV would be 1,040,000,000/20, or
52,000,000.
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<bullet> Tier 2 provides a rebate of $0.45 for all qualifying
orders yielding fee code ZA where a Member has (1) an ADV in Complex
Customer orders >= 0.15% of average OCV; and (2) an ADAV \14\ in Market
Maker orders >= 0.35% of average OCV; and
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\14\ ``ADAV'' means average daily added volume calculated as the
number of contracts added.
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<bullet> Tier 3 provides a rebate of $0.47 per contract for all
qualifying orders yielding fee code ZA where a Member has (1) an ADV in
Complex Customer orders >= 0.25% of average OCV; and (2) has an ADAV in
Market Maker orders >= 0.35% of average OCV.
Next, the Exchange proposes to adopt Complex order Customer (contra
Non-Customer) Non-Penny Volume Tiers, applicable to qualifying Complex
Customer (contra Non-Customers) orders in Non-Penny Program Securities
yielding fee code ZB, to Footnote 11 of the Fee Schedule.\15\ Under the
proposed Complex order Customer (contra Non-Customer) Non-Penny Volume
Tiers, the Exchange proposes to offer three tiers. The specific tiers
and corresponding rebates, as proposed, are as follows:
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\15\ The Exchange proposes to append a reference to Footnote 11
to fee code ZB within the Fee Codes and Associated Fees table.
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<bullet> Tier 1 provides a rebate of $0.84 per contract for all
qualifying orders yielding fee code ZB (i.e., Customer contra Non-
Customer complex orders in Non-Penny Program Securities), where a
Member has an ADV in Complex Customer orders >= 0.10% of average OCV;
<bullet> Tier 2 provides a rebate of $0.88 for all qualifying
orders yielding fee code ZB where a Member has (1) an ADV in Complex
Customer orders >= 0.15% of average OCV; and (2) an ADAV in
[[Page 56816]]
Market Maker orders >= 0.35% of average OCV; and
<bullet> Tier 3 provides a rebate of $0.92 per contract for all
qualifying orders yielding fee code ZB where a Member has (1) an ADV in
Complex Customer orders >= 0.25% of average OCV; and (2) an ADAV in
Market Maker orders >= 0.35% of average OCV.
Finally, the Exchange proposes to adopt a Complex order Non-
Customer Penny Add Volume Tier, applicable to qualifying Complex Non-
Customer orders in Penny Program Securities that add liquidity yielding
fee code ZF, to Footnote 12 of the Fee Schedule.\16\ Under the proposed
Complex order Non-Customer Penny Add Volume Tier, the Exchange proposes
to assess a fee of $0.49 per contract for all qualifying orders
yielding fee code ZF where a Member has (1) an ADV in Complex Customer
orders >= 0.15% of average OCV; and (2) an ADAV in Market Maker orders
>= 0.35% of average OCV.
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\16\ The Exchange proposes to append a reference to Footnote 12
to fee code ZF within the Fee Codes and Associated Fees table.
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Other Clarifying Changes
Finally, the Exchange proposes clarifying changes to the required
criteria for the Customer Penny Add Volume Tiers (set forth in Footnote
1), Customer Penny Take Volume Tier (set forth in Footnote 2), Market
Maker Penny Add Volume Tiers (set forth in Footnote 6), Market Maker
Non-Penny Add Volume Tiers (set forth in Footnote 7), and Professional
Penny Add Volume Tiers (set forth in Footnote 9), to denote that the
required criteria relates to Simple orders rather than Complex orders.
There are no changes to the programs, including any fee assessed or
rebate offered under the programs, as a result of the proposal.
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.\17\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \18\ 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) \19\ 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,\20\ which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its Members and other
persons using its facilities.
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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
\19\ Id.
\20\ 15 U.S.C. 78f(b)(4).
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The Exchange's proposal establishes fees and rebates regarding
complex orders, which is new functionality that will be adopted by the
Exchange.\21\ The Exchange's planned launch of a complex order book is
a competitive offering, and the Exchange believes that its proposed
pricing will incentivize its use.
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\21\ See Securities Exchange Act Release No. 104000 (September
18, 2025), 90 FR 45819 (September 23, 2025) (SR-CboeBZX-2025-126).
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The Exchange operates in a highly competitive market in which
market participants can readily direct order flow to competing venues
if they deem fee levels at a particular venue to be excessive or
incentives to be insufficient. The proposed rule change reflects a
competitive pricing structure designed to incentivize market
participants to direct their order flow to the Exchange, which the
Exchange believes would enhance market quality to the benefit of all
Members.
Fee Codes
With respect to the proposal to adopt a rebate for Customer orders
that interact with Non-Customer orders on the COB (i.e., yielding fee
codes ZA or ZB), the Exchange believes this is reasonable because it
encourages participation on the COB by entry of Customer orders to the
Exchange. The rebate for Customer complex orders is designed to
encourage Customer orders entered into the Exchange, which is
reasonable for the reasons further discussed below. The Exchange notes
that the proposed rebate is in-line with rebates offered by other
options exchanges for similar transactions, albeit slightly higher,
which the Exchange believes is reasonable given it will be a new venue
for trading complex orders and thus offering slightly higher incentives
may attract order flow from incumbent exchanges.\22\ The Exchange also
believes it is reasonable, equitable and not unreasonably
discriminatory not to assess a fee or provide a rebate for Customer-to
Customer orders (i.e., yielding fee code ZC) because other options
exchanges similarly do not charge or provide a rebate for such
orders.\23\
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\22\ See, e.g., NYSE Arca Options Fees and Charges, Trade-
Related Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, Electronic Complex, which provides
Customers a standard rebate of $0.39 per contract for Customer vs.
Non-Customer complex order electronic executions in penny issues and
a standard rebate of $0.75 per contract for Customer vs. Non-
Customer complex order electronic executions in non-penny issues.
See also EDGX Options Fee Schedule, which provides for a standard
rebate of $0.39 per contract for complex Customer (contra Non-
Customer) orders in Penny Program Securities and a standard rebate
of $0.75 per contract for complex Customer (contra Non-Customer)
orders in Non-Penny Program Securities.
\23\ See, e.g., NYSE Arca Options Fees and Charges, Trade-
Related Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, Electronic Complex, which assesses no fee
or provides no rebate for Customer vs. Customer orders in all
issues. See also EDGX Options Fee Schedule, which assesses no fee or
provides no rebate for Customer (contra Customer) complex orders.
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With respect to the fees applicable to Non-Customer Complex orders
(i.e., fee codes ZF, ZG, ZH, or ZJ), the Exchange believes the proposed
fees are reasonable and equitable, as they are similar to fees charged
by at least one other options exchange for similar transactions.\24\
The Exchange notes that while the proposed fees for Non-Customer
complex orders that add or remove liquidity in Non-Penny Program
Securities is slightly higher than similar fees charged by other
options exchange, the Exchange believes such fees remain reasonable as
such fees are part of a balanced pricing structure which supports the
development of the Exchange's complex order offering. The proposed fees
are not unreasonably discriminatory as compared to Customer orders for
the reasons described below, and vis-[agrave]-vis other Non-Customer
orders because all types of Non-Customer
[[Page 56817]]
orders will be charged identical fees as proposed.
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\24\ See, e.g., NYSE Arca Options Fees and Charges, Trade-
Related Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, Electronic Complex, which assesses Non-
Customers a standard transaction fee of $0.50 per contract for
Customer vs. Non-Customer and Non-Customer vs. Non-Customer complex
order electronic executions in penny issues and a standard
transaction fee of $0.85 per contract for Customer vs. Non-Customer
and Non-Customer vs. Non-Customer complex order electronic
executions in non-penny issues, with a $0.12 per contract surcharge
applied to any electronic Non-Customer Complex Order that executes
against a Customer Complex Order (the ``Non-Customer Complex
Surcharge'').
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Similarly, the Exchange believes that fees which include different
rates for Penny Program Securities and Non-Penny Program Securities are
well-established in the options industry, including on the Exchange's
current Fee Schedule.\25\ The Exchange believes it is reasonable,
equitably allocated and non-discriminatory to impose higher fees in
Non-Penny Program Securities than Penny Program Securities because
Penny Program Securities and Non-Penny Program Securities have
different liquidity, spread and trading characteristics. In particular,
spreads in Penny Program Securities are tighter than those in Non-Penny
Program Securities (which trade in increments of $0.05 or greater). The
wider spreads in Non-Penny Program Securities allow for greater profit
potential.
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\25\ Id.
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Providing Customers a rebate or no charge for complex orders
depending on contra-party, while assessing Non-Customers a fee for
complex orders, is reasonable because of the desirability of Customer
activity. The proposed new fees and rebates for complex orders are
generally intended to encourage greater Customer trade volume to the
Exchange. Customer order flow enhances liquidity on the Exchange for
the benefit of all market participants and benefits all market
participants by providing more trading opportunities, which attracts
market makers and other liquidity providers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants. The practice of incentivizing
increased Customer order flow through a fee and rebate schedule in
order to attract professional liquidity providers is, and has been,
commonly practiced in the options markets, and the Exchange.\26\ The
proposed fee and rebate schedule is designed to incentivize Customer
order flow. Other competing exchanges offer different fees and rebates
for orders executed on behalf of different market participants (i.e.,
orders with different origin codes).\27\ Other competing exchanges also
charge different rates for transactions on their complex order books
for customers versus their non-customers in a manner similar to the
proposal, including the provision of rebates to customers.\28\
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\26\ See the Exchange's Fee Schedule, available at: <a href="https://www.cboe.com/us/options/membership/fee_schedule/bzx/">https://www.cboe.com/us/options/membership/fee_schedule/bzx/</a> ; see also,
e.g., MIAX Options Exchange Fee Schedule and EDGX Options Fee
Schedule.
\27\ Id.
\28\ Id.
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The Exchange believes establishing a rebate or no charge for
Customer orders depending on contra-party and a fee for Non-Customer
Orders is also equitable and not unfairly discriminatory. This is
because the Exchange's proposal will apply the same to all similarly
situated participants. Moreover, all similarly situated Complex orders
are subject to the same proposed Fee Schedule, and access to the
Exchange is offered on terms that are not unfairly discriminatory. In
addition, the proposed changes are equitable and not unfairly
discriminatory because, while other market participants (Non-Customers)
will be assessed a fee, Customers will receive a rebate or be assessed
no charge because an increase in Customer order flow may bring greater
volume and liquidity, which benefits all market participants by
providing more trading opportunities and tighter spreads.
The Exchange believes it is reasonable to provide that Customer and
Non-Customer orders that leg into the Simple Book (yielding fee codes
ZO, ZP, or ZC), Simple orders that trade with Complex orders (yielding
fee code ZE), and Complex trades at the open (yielding fee code OC)
will be executed without application of any fee and rebate is
reasonable, equitably allocated, and not unreasonably discriminatory.
Specifically, the Exchange believes it is reasonable to provide that
Customer and Non-Customer orders that leg into the Simple Book and that
Simple order trades with Complex orders will be executed without
application of any fee and rebate, as other options exchanges do not,
in certain instances, charge a fee or provide a rebate for such
orders.\29\ Further, the Exchange believes its proposal is equitable
and not unreasonably discriminatory as it will apply equally to all
orders that leg into the Simple Book and all Simple order trades trade
with Complex orders.
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\29\ See Nasdaq ISE, Section 3, Note 10, which provides there
will be no fee charged or rebate provided when trading against non-
Priority Customer Complex Orders that leg into the regular order
book; Note 11, which provides Market Makers that qualify for Market
Maker Plus in Select Symbols will not pay any fee nor receive any
rebate in the symbols for which they qualify for Market Maker Plus
when trading against Priority Customer Complex Orders that leg into
the regular order book; and Note 18, which provides there will be no
fee charged or rebate provided in Non-Select Symbols when trading
against Priority Customer Complex Orders that leg into the regular
order book. See also Nasdaq ISE, Section 4, Note 1, which provides
that no Priority Customer Complex Order rebates will be provided in
Non-Select Symbols if any leg of the order trades with interest on
the regular order book, irrespective of order size. See also EDGX
Options Fee Schedule which provides there will be no fee charged or
rebate provided for Complex Customer order legs into Simple Book.
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Similarly, the Exchange believes that it is reasonable to provide
that Complex trades at the open (yielding fee code OC) will be executed
without application of any fee and rebate is reasonable, as the
Exchange currently applies a similar fee structure for another type of
trade at the open.\30\ The Exchange believes its proposal is equitable
and not unreasonably discriminatory as it will apply equally to all
Complex trades at the open.
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\30\ See BZX Options Fee Schedule, fee code ``BO'' which
assesses no fee and provides no rebate for RUT trades on the open.
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Volume Tiers
The Exchange believes the proposed volume-based tier incentive
programs are reasonable, equitable, and not unfairly discriminatory.
The Exchange notes that relative volume-based incentives and discounts
have been widely adopted by exchanges,\31\ including the Exchange,\32\
and are reasonable, equitable and non-discriminatory because they are
open to all members on an equal basis and provide additional benefits
or discounts that are reasonably related to (i) the value to an
exchange's market quality and (ii) associated higher levels of market
activity, such as higher levels of liquidity provision and/or growth
patterns. Additionally, the Exchange operates in a highly competitive
market. The Exchange is only one of several options venues to which
market participants may direct their order flow, and it represents a
small percentage of the overall market. Competing options exchanges
offer similar tiered pricing structures to that of the Exchange,
including schedules of rebates and fees that apply based upon members
achieving certain volume and/or growth
[[Page 56818]]
thresholds and offer comparable pricing to members for achieving such
tiers.
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\31\ See e.g., MIAX Options Fee Schedule, Section 1(a)(i), which
provides reduced fees (ranging from $0.03 to $0.32) for Market Maker
orders that reach various percentage thresholds of volume; and
Section 1(a)(iii), which provides certain credits (ranging from
$0.00 to $0.28) for Customer orders, including agency orders
submitted to an exchange auction, that reach various percentage
thresholds; and Cboe EDGX Options Exchange Fee Schedule, Footnote 1,
Customer Volume Tiers; and Footnote 2, Market Maker Volume Tiers;
and Footnote 4, Firm Penny Program Cross-Asset Tier, all of which
provide various tier with different, incrementally more difficult
criteria, many of which are based on average volumes as a percentage
of average OCV.
\32\ See i.e., Cboe BZX Options Exchange Fee Schedule, Footnote
1, Customer Penny Add Volume Tiers; Footnote 2, Customer Penny Take
Volume Tier; Footnote 6, Market Maker Penny Add Volume Tiers; and
Footnote 7, Market Maker Non-Penny Add Volume Tiers.
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Specifically, the Exchange believes its proposal to adopt Complex
order Customer (contra Non-Customer) Penny and Non-Penny Volume Tiers
programs, set forth in Footnotes 10 and 11 respectively, is reasonable
because it provides the opportunity for Members to receive a rebate by
providing for increased volume-based criteria they can reach for,
similar to programs at other options exchanges.\33\ The Exchange
believes the programs will serve as a reasonable means to encourage
Members to increase their remove order volume on the Exchange,
particularly in connection with additional Customer order flow to the
Exchange in order to benefit from the provided rebate. The Exchange
also notes that any overall increased liquidity that may result from
the proposed tier incentives benefits all investors by offering
additional flexibility for all investors to enjoy cost savings,
supporting the quality of price discovery, promoting market
transparency and improving investor protection.
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\33\ See NYSE Arca Options Fees and Charges, Trade-Related
Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, Electronic Complex, Customer Complex
Credit Tiers, which provide certain credits ranging from $0.41 to
$0.50 (for penny issues) and from $0.77 to $0.90 (for non-penny
issues) for electronic executions of Customer Complex interest
against Non-Customer Complex interest for OTP Holders and OTP Firms
that meet applicable volume-based qualifications. See also EDGX
Options Fee Schedule, Customer Volume Tiers applicable to fee code
ZA which provide certain rebates per contract ranging from $0.40 to
$0.50 for Complex Customer (contra Non-Customer) orders in Penny
Program Securities and fee code ZB which provide certain rebates per
contract ranging from $0.80 to $1.00 for Complex Customer (contra
Non-Customer orders) in Non-Penny Program Securities, for Members
that meet applicable volume-based qualifications.
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The Exchange also believes the proposed change to adopt Complex
order Customer (contra Non-Customer) Penny and Non-Penny Volume Tiers
programs is equitable and not unfairly discriminatory because it
applies uniformly to all Members that may qualify for the tiers (i.e.,
Market-Makers (``MMs'')), who will have the opportunity to meet the
tier criteria and receive the corresponding enhanced rebate if such
criteria is met. The Exchange believes it is equitable and not unfairly
discriminatory to include tier criteria designed to incentivize MM
order flow, as an increase in MM activity facilitates tighter spreads,
which may lead to additional increase of order flow from other market
participants, further contributing to a deeper, more liquid market to
the benefit of all market participants by creating a more robust and
well-balanced market ecosystem.
The Exchange also believes that it is equitable and not unfairly
discriminatory to apply the proposed program to Customer order flow, as
compared to other market participant order flow, because Customer order
flow enhances liquidity on the Exchange for the benefit of all market
participants. Specifically, Customer liquidity benefits all market
participants by providing more trading opportunities, which attract
MMs. As noted above, an increase in the activity of MMs in turn
facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
The rebates offered to Members for Customer order flow under the
proposed program are intended to attract more Customer trading volume
to the Exchange.
The Exchange also believes its proposal to adopt a Complex order
Non-Customer Penny Add Volume Tier program, set forth in Footnote 12,
is reasonable because it provides the opportunity for Members to
receive a reduced fee by providing for increased volume-based criteria
they can reach for. As noted above, relative volume-based incentives
and discounts have been widely adopted by exchanges, including the
Exchange. The Exchange believes the proposed program will serve as a
reasonable means to encourage Members to increase their add volume on
the Exchange in order to benefit from the reduced fee. The Exchange
also notes that any overall increased liquidity that may result from
the proposed tier incentives benefits all investors by offering
additional flexibility for all investors to enjoy cost savings,
supporting the quality of price discovery, promoting market
transparency and improving investor protection.
The Exchange believes the proposed change to adopt a Complex order
Non-Customer Penny Add Volume Tier program is equitable and not
unfairly discriminatory because it applies uniformly to all Members
that may qualify for the tier (i.e., MMs), who will have the
opportunity to meet the tier criteria and receive the corresponding
enhanced rebate [sic] if such criteria is met. The Exchange believes it
is equitable and not unfairly discriminatory to include tier criteria
designed to incentivize MM order flow, as an increase in MM activity
facilitates tighter spreads, which may lead to additional increase of
order flow from other market participants, further contributing to a
deeper, more liquid market to the benefit of all market participants by
creating a more robust and well-balanced market ecosystem.
The Exchange also believes that it is equitable and not unfairly
discriminatory to apply the proposed program to Non-Customer order
flow, as compared to Customer order flow, because Non-Customers can
include members that are MMs with quoting obligations, which other
market participants do not have. Further, these rebates are intended to
incentivize Non-Customers to trade more on the Exchange, thereby
providing more trading opportunities for all market participants.
The Exchange also notes that the proposed tiers will not adversely
impact any Member's pricing or their ability to qualify for other
rebate tiers. Rather, should a Member not meet the proposed criteria
for a tier, the Member will merely not receive the corresponding
enhanced rebate or reduced fee. Furthermore, the existing rebate and
fees will continue to uniformly apply to all Members that meet the
required criteria, as amended, per each respective tier.
Other Clarifying Changes
The Exchange believes the proposed modification to specify within
current volume-based tier program that the required criteria is
specific to Simple orders (as opposed to Complex orders) is reasonable,
equitable, and not unfairly discriminatory. As noted above, there are
no changes to the programs, including any fee assessed or rebate
provided. The proposed change is non-substantive and merely clarifies
the existing criteria in light of the Exchange's planned implementation
of its new complex order functionality.
B. Self-Regulatory Organization's Statement on Burden on Competition
[[Page 56819]]
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 changes will impose any burden on intramarket
competition. Particularly, the proposed fee code changes apply to all
participants, as applicable (e.g., based on capacity and order). As
discussed above, while different fees are assessed to different market
participants in some circumstances, these different market participants
have different obligations and different circumstances as discussed
above. For example, preferential pricing to Customer orders is a long-
standing options industry practice which serves to enhance Customer
order flow, thereby attracting MMs to facilitate tighter spreads and
trading opportunities to the benefit of all market participants.
Similarly, the proposed amendments to adopt the Complex order
Customer (contra Non-Customer) Penny and Non-Penny Volume Tiers
programs apply uniformly to all Members that may qualify for the tiers
(i.e., MMs), who will have the opportunity to meet each of the
respective program's tier's criteria and receive the corresponding
enhanced rebate for the tier if such criteria is met. As noted above,
an increase in MM activity facilitates tighter spreads, which may lead
to additional increase of order flow from other market participants,
further contributing to a deeper, more liquid market to the benefit of
all market participants by creating a more robust and well-balanced
market ecosystem.
As discussed above, in regards to applying the proposed programs to
Customer order flow, Customer order flow enhances liquidity on the
Exchange for the benefit of all market participants. Specifically,
Customer liquidity benefits all market participants by providing more
trading opportunities, which attracts MMs. An increase in the activity
of these market participants in turn facilitates tighter spreads, which
may cause an additional corresponding increase in order flow from other
market participants. The rebates offered to Customers under the
programs are intended to attract more Customer trading volume to the
Exchange.
The Complex order Non-Customer Penny Add Volume Tier program
applies uniformly to all Members that may qualify for the tier (i.e.,
MMs), who will have the opportunity to meet the program's tier criteria
and receive the corresponding reduced fee for the tier if such criteria
is met. All Members that qualify for the tier are able to increase
their applicable order flow to attempt to achieve the program's tier.
Should a Member not meet the criteria, the Member will merely not
receive that corresponding enhanced rebate or reduced fee, as
applicable. As noted above, an increase in MM activity facilitates
tighter spreads, which may lead to additional increase of order flow
from other market participants, further contributing to a deeper, more
liquid market to the benefit of all market participants by creating a
more robust and well-balanced market ecosystem.
Finally, the proposed clarifying change will not impose any burden
on intramarket competition. As noted above, there are no changes to the
programs, including any fee assessed or rebate provided. The proposed
change is non-substantive and merely clarifies the existing criteria in
light of the Exchange's planned implementation of its new complex order
functionality.
The Exchange also does not believe that the proposed rule change
will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including 17 other options exchanges and
off-exchange venues. Additionally, the Exchange represents a small
percentage of the overall market. Based on publicly available
information, no single options exchange has more than 14% of the market
share.\34\ Therefore, no exchange possesses significant pricing power
in the execution of option order flow. Indeed, participants can readily
choose to send their orders to other exchange and off-exchange venues
if they deem fee levels at those other venues to be more favorable.
Moreover, the Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \35\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
Circuit stated as follows: ``[n]o one disputes that competition for
order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S.
national market system, buyers and sellers of securities, and the
broker-dealers that act as their order-routing agents, have a wide
range of choices of where to route orders for execution'; [and] `no
exchange can afford to take its market share percentages for granted'
because `no exchange possesses a monopoly, regulatory or otherwise, in
the execution of order flow from broker dealers'. . . .''.\36\
Accordingly, the Exchange does not believe its proposed fee change
imposes any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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\34\ See Cboe Global Markets U.S. Options Monthly Market Volume
Summary (September 25, 2025), available at <a href="https://markets.cboe.com/us/options/market_statistics/">https://markets.cboe.com/us/options/market_statistics/</a>.
\35\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\36\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received written 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 \37\ and paragraph (f) of Rule 19b-4 \38\
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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\37\ 15 U.S.C. 78s(b)(3)(A).
\38\ 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:
[[Page 56820]]
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#4b393e272e66282426262e253f380b382e28652c243d"><span class="__cf_email__" data-cfemail="dfadaab3baf2bcb0b2b2bab1abac9facbabcf1b8b0a9">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-148 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-CboeBZX-2025-148. 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-CboeBZX-2025-148 and should be submitted
on or before December 29, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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\39\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22148 Filed 12-5-25; 8:45 am]
BILLING CODE 8011-01-P
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