Notice2025-22723
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule With Respect to Its Floor Broker Sliding Scale Rebate Program and Floor Broker Sliding Scale Supplemental Rebate Program
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Published
December 15, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 238 (Monday, December 15, 2025)</title>
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[Federal Register Volume 90, Number 238 (Monday, December 15, 2025)]
[Notices]
[Pages 58068-58071]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22723]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104358; File No. SR-CBOE-2025-083]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule With Respect to Its Floor Broker Sliding Scale Rebate
Program and Floor Broker Sliding Scale Supplemental Rebate Program
December 10, 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 December 1, 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, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its Fees Schedule with respect to its Floor Broker Sliding
Scale Rebate Program and Floor Broker Sliding Scale Supplemental Rebate
Program (collectively, the ``Floor Broker Rebate Programs''). The text
of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx">http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx</a>), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
[[Page 58069]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fees Schedule, effective
December 1, 2025.
The Exchange first notes that it 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. More specifically, the
Exchange is only one of 18 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 14% of the market share.\3\
Thus, in such a low-concentrated and highly competitive market, no
single options exchange possesses significant pricing power in the
execution of option order flow. The Exchange believes that the ever-
shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow or
discontinue to reduce use of certain categories of products in response
to fee changes. Accordingly, competitive forces constrain the
Exchange's transaction fees, and market participants can readily trade
on competing venues if they deem pricing levels at those other venues
to be more favorable. In response to competitive pricing, the Exchange,
like other options exchanges, offers rebates and assesses fees for
certain order types executed on or routed through the Exchange.
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\3\ See Cboe Global Markets U.S. Options Monthly Market Volume
Summary (November 26, 2025), available at <a href="https://markets.cboe.com/us/options/market_statistics/">https://markets.cboe.com/us/options/market_statistics/</a>.
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Also, in response to the competitive environment, the Exchange
offers various tiered incentive programs which provide Trading Permit
Holders (``TPHs'') opportunities to qualify for higher rebates or
reduced rates where certain volume criteria and thresholds are met.
Tiered pricing provides an incremental incentive for TPHs to strive for
higher tier levels, which provides increasingly higher benefits or
discounts for satisfying increasingly more stringent criteria. For
example, the Exchange currently offers, among other tiered volume
programs, a Floor Broker Sliding Scale Rebate Program, which offers
four tiers that provide rebates on a sliding scale \4\ for qualifying
orders where a TPH meets certain liquidity thresholds. The Floor Broker
Sliding Scale Rebate Program applies to all products except for
Underlying Symbol List A,\5\ Sector Indexes,\6\ DJX, CBTX, MBTX, MRUT,
MXEA, MXEF, MXACW, MXUSA, MXWLD, NANOS, SPEQX, XSP, and FLEX Micros
(``multiply-listed options''). The Floor Broker Sliding Scale Rebate
Program offers two categories of rebates that correspond to each of the
proposed tiers; one that applies to Firm Facilitated orders (i.e.,
orders that yield fee code FF) \7\ and another that applies to all
other non-Firm Facilitated orders (i.e., orders that do not yield fee
code FF).
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\4\ The rebate offered under each tier is only applied to the
qualifying volume within that tier. In addition, the Exchange
calculates the average rebate for each type of rebate (Firm
Facilitated and Non-Firm Facilitated) based on the TPH's total
qualifying volume across all four tiers plus its qualifying baseline
volume (which corresponds to a rebate of $0.00). Each respective
average rebate is applied to the percentage of qualifying volume
that corresponds specifically to the type of order (Firm Facilitated
or Non-Firm Facilitated) volume and added together, which results in
a final average rebate. The final average rebate is then applied to
the TPH's total qualifying executions. This is consistent with the
manner in which the Exchange calculates rebates for other sliding
scale programs offered under the Fees Schedule.
\5\ See Cboe Options Fees Schedule, Footnote 34, which provides
that Underlying Symbol List A includes OEX, XEO, RUT, RLG, RLV, RUI,
UKXM, SPX (includes SPXW), SPESG and VIX.
\6\ See Cboe Options Fees Schedule, Footnote 47, which provides
that Sector Index underlying symbols include IXB, SIXC, IXE, IXI,
IXM, IXR, IXRE, IXT, IXU, IXV AND IXY. Corresponding option symbols:
SIXB, SIXC, SIXE, SIXI, SIXM, SIXR, SIXRE, SIXT, SIXU, SIXV AND
SIXY.
\7\ Orders that yield fee code FF are not assessed a charge. See
Cboe U.S. Options Fee Schedules, Fees and Associated Fee Codes,
available at: <a href="https://markets.cboe.com/us/options/membership/fee_schedule/cboe/">https://markets.cboe.com/us/options/membership/fee_schedule/cboe/</a>.
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The Exchange also offers a Floor Broker Sliding Scale Supplemental
Rebate Program. Similar to the Floor Broker Sliding Scale Program, the
Floor Broker Sliding Scale Supplemental Rebate Program (``Supplemental
Rebate Program'') offers four tiers that provide rebates on a sliding
scale for qualifying orders where a TPH meets certain liquidity
thresholds. The Supplemental Rebate Program applies to all products
except Underlying Symbol List A, Sector Indexes, DJX, CBTX, MBTX, MRUT,
MXEA, MXEF, MXACW, MXUSA, MXWLD, NANOS, SPEQX, XSP and FLEX Micros.
Under the Supplemental Rebate Program, the Exchange calculates rebates
based on qualifying volumes under the Supplemental Rebate Program, and
eligible TPHs will receive the rebates only on qualifying Non-Firm
Facilitated orders processed through the Floor Broker Sliding Scale
Rebate Program (specifically, Non-Customer, Non-Strategy Floor Broker
orders that do not yield fee code FF).
The Exchange now proposes to amend the Floor Broker Rebate
Programs. Specifically, the Exchange propose to amend the Floor Broker
Sliding Scale Rebate Program so that the rebates that correspond to
Non-Firm Facilitated orders (i.e., orders that do not yield fee code
FF) also apply to the portion of Floor Broker orders executed against
Market-Maker quotes or orders. As proposed, for purposes of calculating
Volume under this program, the Exchange will count a TPH's Non-
Customer, Non-Strategy, Floor Broker Volume, including the portion of
such orders executed against Market-Maker quotes or orders.
Similarly, the Exchange proposes to amend the Supplemental Rebate
Program, so that eligible TPHs will receive the rebates on qualifying
Non-Firm Facilitated orders processed through the Floor Broker Sliding
Scale Rebate Program, as amended (i.e., Non-Customer, Non-Strategy
Floor Broker orders that do not yield fee code FF and the portion of
Floor Broker orders executed against Market-Maker quotes or orders).
The Exchange notes that other options exchanges include Floor
Broker executions against Market-Makers within their Floor Broker
rebate structures.\8\ The changes are designed to encourage Floor
Brokers to increase their order flow in all multiply-listed options to
the Exchange's trading floor to meet the tier criteria in order to
receive the corresponding rebate for their qualifying orders. The
Exchange believes that incentivizing increased liquidity to its trading
floor allows the Exchange to maintain a robust hybrid trading
environment that serves to support price discovery and increased
[[Page 58070]]
execution opportunities in open outcry, to the benefit of all market
participants.
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\8\ See, e.g., BOX Exchange Fee Schedule, Section V(C) which
provides that Floor Brokers that submit QOO and FOO Orders will
receive a $0.20 per contract enhanced rebate for executions that
trade with a Floor Market Maker, in lieu of the $0.10 and $0.05 per
contract rebates described in BOX Exchange Fee Schedule Section
V.C.; see also NYSE American Options Fee Schedule, Section III.E.
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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.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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) \11\ 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,\12\ which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its TPHs and other
persons using its facilities.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
\12\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposed changes to the Floor Broker
Rebate Programs are consistent with Section 6(b)(4) of the Act in that
the proposed rule changes are reasonable, equitable and not unfairly
discriminatory. As noted above, 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 incentive programs that offer rebates or rates that
apply based upon TPHs achieving certain volume threshold. Moreover,
other options exchanges include Floor Broker executions against Market-
Makers within their Floor Broker rebate structures.\13\
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\13\ See, e.g., BOX Exchange Fee Schedule, Section V(C) which
provides that Floor Brokers that submit QOO and FOO Orders will
receive a $0.20 per contract enhanced rebate for executions that
trade with a Floor Market Maker, in lieu of the $0.10 and $0.05 per
contract rebates described in BOX Exchange Fee Schedule Section
V.C.; see also NYSE American Options Fee Schedule, Section III.E.
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The Exchange believes the proposed changes to the Floor Broker
Rebate Programs are reasonable and equitable because they are designed
to eliminate a disincentive for Floor Brokers to route orders to the
Exchange (and potentially route to other exchanges which offer rebates)
when such orders may execute against Market-Makers. By including all
Floor Broker executions in rebate calculations, the Exchange encourages
Floor Brokers to bring additional order flow to the Exchange. As noted
above, the Exchange believes that incentivizing increased liquidity to
its trading floor allows the Exchange to maintain a robust hybrid
trading environment that serves to support price discovery and
increased execution opportunities in open outcry, to the benefit of all
market participants. Further, the proposed change aligns the Exchange's
rebate structure with competing options exchanges that provide rebates
on similar executions, ensuring Floor Brokers at the Exchange are not
disadvantaged relative to floor brokers at other options exchanges.
The Exchange believes that the proposed changes to the Floor Broker
Rebate Programs represent an equitable allocation of fees and are not
unfairly discriminatory because the changes to the Floor Broker Rebate
Programs apply uniformly to all qualifying TPHs, in that all TPHs that
submit the requisite order flow (i.e., Non-Customer, Non-Strategy,
Floor Broker Volume in multiply-listed options, including the portion
of such orders executed against Market-Maker quotes or orders) have the
opportunity to compete for and achieve the program tiers. The
additional rebates will apply automatically and uniformly to all TPHs
that achieve the corresponding criteria.
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 that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act. As noted above, the changes to
the Floor Broker Rebate Programs apply uniformly to all qualifying
TPHs, in that all TPHs that submit the requisite order flow (i.e., Non-
Customer, Non-Strategy, Floor Broker Volume in multiply-listed options,
including the portion of such orders executed against Market-Maker
quotes or orders) have the opportunity to compete for and achieve the
program tiers.
The Exchange believes the proposed rule change does not impose any
burden on intermarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. As noted above, other
options exchanges include Floor Broker executions against Market-Makers
within their Floor Broker rebate structures.\14\ As previously
discussed, the Exchange operates in a highly competitive market. TPHs
have numerous alternative venues they may participate on and direct
their order flow, including 17 other options exchanges. 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. Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchanges
if they deem fee levels at those other venues to be more favorable. As
noted above, the Exchange believes that the proposed fee changes are
comparable to that of other exchanges offering similar functionality.
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.'' 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
[[Page 58071]]
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'. . . .''. 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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\14\ See, e.g., BOX Exchange Fee Schedule, Section V(C) which
provides that Floor Brokers that submit QOO and FOO Orders will
receive a $0.20 per contract enhanced rebate for executions that
trade with a Floor Market Maker, in lieu of the $0.10 and $0.05 per
contract rebates described in BOX Exchange Fee Schedule Section
V.C.; see also NYSE American Options Fee Schedule, Section III.E.
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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 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 \15\ and paragraph (f) of Rule 19b-4 \16\
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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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#d7a5a2bbb2fab4b8babab2b9a3a497a4b2b4f9b0b8a1"><span class="__cf_email__" data-cfemail="5b292e373e76383436363e352f281b283e38753c342d">[email protected]</span></a>. Please include
file number SR-CBOE-2025-083 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-2025-083. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-CBOE-2025-083 and should be submitted on
or before January 5, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22723 Filed 12-12-25; 8:45 am]
BILLING CODE 8011-01-P
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