Notice2026-02883
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Its Rules Relating to Designated Primary Market-Makers (“DPMs”) and DPM Appointments in Global Trading Hours and Curb Sessions
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
February 13, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 30 (Friday, February 13, 2026)</title>
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[Federal Register Volume 91, Number 30 (Friday, February 13, 2026)]
[Notices]
[Pages 6966-6971]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-02883]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104807; File No. SR-CBOE-2026-016]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To Amend Its Rules Relating to
Designated Primary Market-Makers (``DPMs'') and DPM Appointments in
Global Trading Hours and Curb Sessions
February 10, 2026.
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 January 30, 2026, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to modify rules pertaining to Designated Primary Market-Makers
(``DPMs'') to (1) clarify the Exchange may appoint DPMs to Global
Trading Hours (``GTH'') and Curb Trading Hours (``Curb'') sessions and
that DPMs may be the same across multiple trading sessions or different
(or no DPM) for an option class in Regular Trading Hours (``RTH''),
GTH, and/or Curb sessions; (2) provide that DPM obligations and
participation entitlements will apply to GTH and Curb sessions; and (3)
make certain administrative changes. 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/options/regulation/rule_filings/bzx/">https://www.cboe.com/us/options/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
[[Page 6967]]
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
DPMs are Trading Permit Holders (``TPHs'') that are approved by the
Exchange to function in appointed securities as a Market-Maker.\3\ The
Exchange proposes to amend certain Cboe Rules regarding DPM
appointments. Specifically, the Exchange proposes to (1) clarify the
Exchange may appoint DPMs to GTH and Curb sessions and that DPM
appointments for an option class may differ by trading session \4\
while acknowledging that a trading session may not have a DPM; \5\ (2)
provide that heightened DPM quoting obligations and participation
entitlements apply during GTH and Curb sessions; and (3) make certain
administrative changes.
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\3\ See Rule 1.1 (definition of DPM).
\4\ The term ``trading session'' means the hours during which
the Exchange is open for trading for Regular Trading Hours, Global
Trading Hours or Curb Trading Hours (each of which may be referred
to as a trading session), each as set forth in Rule 5.1. Unless
otherwise specified in the Rules or the context otherwise indicates,
all Rules apply in the same manner during each trading session. See
Rule 1.1 (Definitions).
\5\ See Rule 5.50(l), which states that the Exchange may
designate a class for trading without a DPM.
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First, the Exchange proposes to amend Cboe Rules 1.1 and 3.53 to
update requirements and administrative processes for DPMs to explicitly
state that the Exchange may appoint DPMs for all trading sessions
(i.e., RTH, GTH,\6\ and Curb \7\), and that DPMs may be the same or
different across trading sessions. Pursuant to the definition of DPM in
Cboe Rule 1.1 and the provisions of Cboe Rule 5.52(h), the Exchange may
determine DPM appointments for classes (including that t a DPM may not
be appointed for a class). Pursuant to Cboe Rule 1.5, if Cboe Rules
permit the Exchange to make a determination (including on a class-by-
class basis), the Exchange may make that determination on a trading
session-by-trading session basis. Therefore, Cboe Rules permit the
Exchange to determine DPM appointments for all trading sessions, and
the Exchange may appoint the same DPM for all trading sessions or may
appoint different DPMs on a trading session-by-trading session basis.
The proposed rule change merely explicitly states this in Cboe Rules.
The Exchange proposes to update the definition of DPM in Cboe Rule 1.1
to state that (1) the Exchange designates DPMs per trading session, (2)
On-Floor DPM is a term applicable to RTH sessions (as the floor
operates only during RTH), (3) a DPM's request to function as an Off-
Floor DPM is applicable to RTH sessions, and (4) DPMs that are
appointed for a GTH or Curb session are considered Off-Floor DPMs
within Cboe Rules (since those sessions are electronic only).
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\6\ Except under unusual conditions as may be determined by the
Exchange or the Holiday hours set forth in Rule 5.1(d), Global
Trading Hours are from 8:15 p.m. (previous day) to 9:25 a.m. on
Monday through Friday. See Rule 5.1(c).
\7\ Except under unusual conditions as may be determined by the
Exchange, or the Holiday hours set forth in Rule 5.1(e), Curb
Trading Hours are from 4:15 p.m. to 5:00 p.m. on Monday through
Friday. See Rule 5.1(d).
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To further codify that the Exchange may appoint DPMs by trading
session, the Exchange proposes to amend Cboe Rule 3.53, which
establishes certain processes for DPMs, including selection and
termination processes for DPMs. Specifically, the Exchange proposes to
amend Cboe Rule 3.53(d) to state that the Exchange has the authority to
specify the trading session(s) for a DPM appointment as a possible
condition on an approval. Furthermore, since it may be necessary to
facilitate trading in a specified extended hours trading session
without a DPM when a DPM appointment is terminated, the Exchange
proposes to amend Cboe Rule 3.53(f) to confirm that a DPM may not be
designated for a GTH or Curb session when the existing DPM for such
session is terminated. This proposed change acknowledges and aligns
with Cboe Rule 5.50(l), which provides that a class may be designated
for trading without a DPM (during any or all trading sessions, as
determined by the Exchange).
By amending these Cboe Rules to explicitly state the Exchange may
designate a DPM by trading session, the Exchange recognizes that a DPM
appointed for a class in RTH may not intend to participate in GTH or
Curb sessions. Consequently, the Exchange proposes to amend Cboe Rules
to clarify the Exchange's authority to designate different DPMs for
RTH, GTH, and/or Curb sessions. This addresses the possibility that a
DPM for a class in one trading session may not want the DPM role in
other trading sessions. The Exchange believes having the ability to
appoint different DPMs for different trading sessions may help bolster
market liquidity in each trading session in which the Exchange chooses
to appoint a DPM as it will not impose a DPM appointment to a TPH in a
trading session(s) during which it chooses to not operate. In other
words, a DPM in RTH, for example, will not be obligated to assume the
DPM role in another session only to maintain its DPM appointment in the
session it wants. Also, a DPM will not be required to relinquish its
DPM appointment in a class for one trading session because it does not
operate as the DPM in another trading session for the option class.
Second, the Exchange proposes to amend its Rules to address DPM
participation entitlements and quoting obligations during GTH and Curb
sessions. The Exchange proposes to amend Cboe Rule 5.54(a) to provide
that the obligations of DPMs that currently apply during RTH will also
apply during to GTH and Curb, and compliance with the heightened
continuous quoting obligations will be measured across all trading
sessions for which a DPM has an appointment. As the Exchange
historically has appointed LMMs to GTH (and Curb) but not DPMs, Cboe
Rule 5.54(a) limits application of a DPM's obligations to RTH. If the
Exchange determines to appoint a DPM to GTH and/or Curb, the Exchange
believes it is appropriate for these obligations in Cboe Rule 5.54(a),
including the continuous quoting obligation in subparagraph (1), to
apply to DPMs during those trading sessions in the same manner as they
do during RTH when the DPM has an appointment during those trading
sessions. With respect to how a DPM's compliance with continuous
quoting obligations is measured, the proposed rule change amends Cboe
Rule 5.54(a)(1) to provide that this will occur across trading sessions
for which the DPM has an appointment.
The Exchange notes this is consistent with existing Cboe EDGX
Exchange, Inc. (``EDGX'') Rules regarding DPMs. Specifically, pursuant
to EDGX Rule 22.3(a), if a Market Maker selects an appointment in an
option class, that appointment applies during both GTH and RTH and
thus, the Market-Maker would have an appointment to make markets in the
option class during both GTH and RTH on EDGX.\8\ Similarly, EDGX Rule
22.2(e) provides that a Market-Maker may request the Exchange appoint
it as DPM to a class for all trading sessions. As EDGX Rules do not
contain a heightened continuous
[[Page 6968]]
quoting obligation for DPMs as the Exchange's Rules do,\9\ the only
continuous quoting obligation to which DPMs are subject is the standard
obligation applicable to all Market-Makers.\10\ EDGX Rule 22.6(d)
explicitly provides that Market-Maker continuous quoting obligations
(and thus DPM continuous quoting obligations) apply to the class for an
entire trading day, including both trading sessions of RTH and GTH
(there is no Curb session in the EDGX Rules). Consequently, since the
Market-Maker continuous quoting obligation set forth in EDGX Rule
22.6(d) is the continuous quoting obligation for DPMs on EDGX and is
measured across all trading sessions, and since EDGX Rules state that
DPM appointments apply to all trading sessions for a class, the
continuous quoting obligations applicable to a DPM on EDGX apply across
all trading sessions. This approach is also currently used for Market-
Maker obligations in extended trading hour sessions.\11\
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\8\ See also Securities Exchange Act Release No. 34-85797; (May
7, 2019), 84 FR 20920 (May 13, 2019) (SR-CboeEDGX-2019-027).
\9\ See Cboe Rule 5.54(a) which requires that a DPM provide
continuous electronic quotes 90% of the time as applicable.
\10\ See EDGX Rule 22.6(d) requires that a Market-Maker enter
continuous bids and offers 60% of the time as applicable.
\11\ See Rule 5.52(d)(2)(E), which states that Market-Maker
obligations will apply across trading sessions and that if a Market-
Maker has an appointment in a class that is open for trading during
multiple trading sessions, the Exchange will determine a Market-
Maker's compliance with the continuous electronic quoting
requirement across the trading day.
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Although measuring a DPM's continuous quoting obligation for the
entire trading day will increase the quoting requirement for the DPM
because of the increase of trading time for which quotes must be
provided, the DPM can meet the increased obligation through activity in
RTH, GTH, and Curb.\12\ Since Cboe Rule 5.54(a) provides that DPM
obligations require continuous quoting in a DPM's appointed classes,
the Exchange calculates DPM compliance with quoting obligations across
all of a DPM's option classes in totality rather than on a class-by-
class basis. To illustrated how the proposed rule change will apply the
quoting obligation across trading sessions, when applicable, the
following example assumes that a DPM is appointed to 10 classes, nine
of which are equity option classes that trade in RTH only and the
remaining option class is an index option that trades in RTH, GTH, and
Curb. Each option class has 100 series. For the nine equity option
classes, each one trades for 405 minutes (24,300 seconds) in RTH in a
trading day. To include this trading time in the calculation to
determine compliance, the RTH time is multiplied by the number of
series (in this case, 100), resulting in 40,500 minutes (2,430,000
seconds) per each class. The Index option will trade for 790 minutes
(47,400 seconds) in GTH, 45 minutes (2700 seconds) in Curb, and 405
minutes (24,300 seconds) in RTH, for a total of 1,240 minutes (74,400
seconds). To include this trading time in the calculation to determine
compliance, the total time is multiplied by 100 series, resulting in
124,000 minutes (7,440,000 seconds). To determine compliance with the
90% continuous quoting obligation in Cboe Rule 5.54, the total trading
times will be combined, resulting in 29,310,000 seconds ((2,430,000
seconds x 9 classes) + 7,440,000 seconds) and multiplied by 90% to
equal 26,379,000 seconds that the DPM must provide continuous quoting.
To meet this quoting obligation, the DPM could quote 100% of the equity
classes (21,870,000 seconds) and would be required to quote the index
class for 4,509,000 seconds (which is 67% of that trading session) to
meet the overall 90% requirement obligation. Alternatively, if the DPM
only quoted 100% of the index class in GTH and Curb (5,010,000 seconds
combined), the DPM would still be required to quote the equity option
classes for 21,369,000 (which is 97.70% of the RTH trading session for
equities) to meet the 90% requirement overall. Additionally, if the DPM
quoted 100% of the index class in GTH, RTH, and Curb (7,440,000 seconds
total), the DPM would still be required to quote the equity option
classes for 18,939,000 (which is 72.84% of the RTH trading session for
equities) to meet the 90% requirement overall.
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\12\ See note 8 supra.
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As Cboe Rule 5.54 already provides that DPM quoting obligations
apply collectively to all of a DPM's appointed classes,\13\ the
Exchange believes that applying the continuous quoting requirements for
DPMs collectively across all classes and trading sessions is a fair and
efficient way for the Exchange and market participants to evaluate
compliance with the continuous quoting obligation. Applying the
continuous quoting requirements collectively across all classes and
trading sessions rather than on a class-by-class and trading session-
by-trading session basis is beneficial to DPMs by providing some
flexibility to choose which series in their appointed classes they will
continuously quote--increasing the continuous quoting in the series of
one class while allowing for a decrease in the continuous quoting in
the series of another class. This flexibility, however, does not
diminish the DPM's obligation to continuously quote in a significant
percentage of series for a significant part of the trading day. This
flexibility is especially important for classes that have relatively
few series and may prevent a DPM from reaching the continuous quoting
obligation when failing to quote 90% of the trading day in more than
one series in an appointed class. The Exchange believes that the
proposed rule change will not diminish, and may in fact increase,
market making activity on the Exchange, by applying continuous quoting
obligations in a reasonable manner, which is in alignment with rules
already in place on another options exchange. The Exchange does not
anticipate that DPM quoting will routinely decrease and notes that, as
illustrated in the examples above, that DPM obligation is expected to
remain above the standard Market-Maker obligation requiring continuous
quoting during 60% of the trading day. By requiring that a DPM meet its
continuous quoting obligations across all trading sessions in which it
is appointed as the DPM (and collectively across classes, as is the
case today), a DPM might meet its obligations on a given day even if it
falls below obligation requirements in one trading session if the DPM
surpasses obligations requirements in another session because the total
activity across trading sessions for a DPM will be used to determine
compliance with continuous quoting obligation requirements.
Additionally, this approach is intended to help reduce the rigidity of
quoting requirements for a DPM of multiple sessions if trading activity
is less in one of the sessions. The Exchange believes that applying the
existing DPM obligations for RTH trading to GTH and Curb trading
sessions will promote active markets in these extended trading hours
sessions. Furthermore, applying such obligations across multiple
trading sessions if a DPM is appointed to more than one trading session
for a class will help foster liquid markets while providing flexibility
to DPMs to meet their obligations. The Exchange does not believe that
determining compliance with quotation obligations across trading
sessions will result in less liquidity in RTH. To the contrary, the
Exchange anticipates that DPMs may utilize activity in RTH to meet any
shortfalls in quoting obligations that a DPM may experience in GTH or
Curb. The Exchange has observed that trading
[[Page 6969]]
characteristics during RTH are typically different than those during
extended hours trading sessions in that extended sessions have lower
trading levels, reduced liquidity, and fewer participants. Therefore,
the Exchange believes it is appropriate to extend to DPMs this
flexibility across trading sessions to meet continuous quoting
requirements.
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\13\ See Rule 5.54(a)(2), which states that compliance with DPM
quoting obligation applies to all of a DPM's appointed classes
collectively.
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The Exchange also proposes to amend Cboe Rule 5.32 to permit the
Exchange to apply the DPM participation entitlement during GTH and
Curb. Cboe Rule 5.32(a) provides the Exchange with authority to
determine which allocation algorithm and priority overlays, including
the DPM participation entitlement, will apply on a class-by-class
basis. As noted above, pursuant to Cboe Rule 1.5, if Cboe Rules permit
the Exchange to make a determination (including on a class-by-class
basis), the Exchange may make that determination on a trading session-
by-trading session basis. Therefore, Cboe Rules currently permit the
Exchange to determine what allocation algorithm and priority overlays
it may apply to RTH, GTH, and Curb. However, Cboe Rules do not permit
the DPM participation entitlement to apply during GTH and Curb. As the
Exchange may determine to appoint DPMs during GTH and Curb going
forward, the Exchange proposes to permit it to be able to apply the DPM
participation entitlement during those trading sessions in the same
manner it can during RTH. Given that a DPM will be subject to
heightened continuous quoting obligations during GTH and Curb, as
discussed above, the Exchange proposes to permit it to apply the DPM
participation entitlement as a priority overlay during those trading
sessions, as it is able to do during RTH. Specifically, the Exchange
proposes to amend Cboe Rule 5.32(a)(2)(B)(iv) to state that DPM
participation entitlements may apply during GTH and Curb sessions.
Pursuant to Cboe Rule 5.32(a)(2)(B), the Exchange may apply one or more
of the participation entitlements provided in the rule,\14\ and the
proposed addition to Cboe Rule 5.32(a)(2)(B)(iv) provides that the
Exchange may apply participation entitlements in the same manner during
GTH and Curb. The Exchange believes that applying the existing
participation entitlements for RTH to GTH and Curb sessions will
appropriately incentivize Market-Maker participation in the extended
trading hours sessions for which they are appointed to help provide
market liquidity during such sessions.
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\14\ See Rule 5.32(a)(2)(B), which states that if a DPM has a
quote at the highest bid or lowest offer, it will receive the
greater of (i) the number of contracts it would receive pursuant to
the applicable base allocation algorithm and (ii) 50% of the
contracts if there is one other non-Priority Customer, 40% of the
contracts if there are two non-Priority Customers, or 30% of the
contracts if there are three or more non-Priority Customers with
orders or quotes on the Book at that price.
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Finally, as an administrative change, the Exchange proposes to
amend Cboe Rule 5.50(b), which establishes cutoff times by trading
sessions for submission of Market-Maker appointment requests to remove
specific time requirements from the Rules. Although such cutoff times
were previously added to Cboe Rules, relocation of these time
requirements will enhance the Exchange's ability to react to future
advancements in technology that may allow the Exchange to provide more
time to Market-Makers to submit appointment requests. Consequently, the
Exchange believes this type of technical detail should be maintained in
the Exchange's technical specifications rather than Cboe Rules and
therefore proposes to replace these specific cutoff times currently
provided in Cboe Rules with a statement that such deadlines will be
specified in the Exchange's technical specifications.\15\ This change
aligns with Cboe Rule 1.5(a) which states that the Exchange will
announce determinations to TPHs via various means of communication,
including specifications. By relocating cutoff times from the Rules to
technical specifications documentations, the Exchange will have the
ability to adjust times more quickly in the future. Notice of these
cutoff times and any subsequent changes to them will be provided via
technical specification documentation as required by Cboe Rule 1.5(a).
In the event that technology advances allow the Exchange to process
requests with less notice, the Exchange may modify the cutoff times in
the technical specifications and provide Market-Makers more time to
meet deadlines. Furthermore, removing the specific time requirements in
Cboe Rule 5.50 will align the rule's structure to Cboe Rule 5.54(a)(6)
which provides that the Exchange may determine time requirements but
does not include the details of such time requirements within Cboe
Rules. The Exchange believes this proposed change will therefore
provide greater consistency within Cboe Rules.
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\15\ See Rule 1.5(a), which states that the Exchange will
announce determinations to TPHs via various means of communication,
including specifications.
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As an additional administrative change, the Exchange also proposes
to amend Cboe Rule 5.50(l) to return language to the provision that was
inadvertently removed from the Rules in a rule change connected to the
System migration that took place in 2019.\16\ The proposed rule change
merely adds back to the rule language that states that if the Exchange
determines to list SPX or VIX on a group basis, it will have the
authority to change the eligible categories of Market-Maker
participants for each group.
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\16\ See Securities Exchange Act Release No. 34-87024 (September
19, 2019), 84 FR 50545 (September 25, 2019) (SR-CBOE-2019-059).
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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.\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.
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\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
\19\ Id.
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In particular, the Exchange believes the proposed rule change to
clarify in Cboe Rules that the Exchange may appoint DPMs to all trading
sessions and on a trading session-by-trading session basis will remove
impediments to and perfect the mechanism of a free and open market and
protect investors, as such changes add transparency and clarity to Cboe
Rules. In explicitly stating that DPM appointment designations may
apply to one or multiple trading session(s), the Exchange recognizes
that not all DPMs may intend to trade in all available trading sessions
for an option class, and designation of different DPMs for a class by
trading session may be appropriate to help provide market liquidity.
The Exchange may designate a DPM for RTH and another for GTH or Curb
based on DPM expressed interest in specific trading session(s), or, as
indicated in
[[Page 6970]]
Cboe Rule 5.50(l), the Exchange may list for trading a class without a
DPM during a trading session. As noted above, this flexibility is
already permitted under Cboe Rules. The flexibility to designate
different DPMs provides the Exchange with the ability to appoint
dedicated liquidity providers in all trading sessions to make active
markets, which ultimately benefits investors.
Furthermore, the Exchange believes the proposed rule change to
apply DPM participation entitlements and obligations to GTH and Curb
sessions as well as measuring compliance with the heightened continuous
quoting obligations across trading sessions for DPMs with appointments
for more than one trading session in a class 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. The proposed
rule change will ultimately apply the same obligations to DPMs during
GTH and Curb as are currently applied to DPMs during RTH. Additionally,
the proposed rule change will provide the Exchange with the same
flexibility to apply the DPM participation entitlement during GTH and
Curb in the same manner it is applied during RTH. The Exchange believes
being able to apply the DPM participation entitlement during GTH and
Curb may help incentivize Market-Maker participation in GTH and Curb
sessions, balanced with the heightened continuous quoting obligations
that will apply during those trading sessions.
While the proposed rule change increases the total time a DPM must
quote if it is appointed to GTH and/or Curb, this increase is de
minimis given that a DPM's compliance with its continuous quoting
obligation is based on all classes in which it has an appointment in
the aggregate across trading sessions. A Market-Maker may choose to
express interest in becoming a DPM during GTH and/or Curb. The Exchange
believes that the slight additional burden of extending the continuous
quoting obligation to the GTH and Curb trading sessions for DPMs'
appointments in those trading sessions is outweighed by the benefits to
investors that may result from that liquidity. The proposed rule change
also continues to maintain a balance of DPM benefits and obligations,
as the continuous quoting obligation and DPM participation entitlement
that will apply during GTH and Curb are the same as those that apply
today during RTH. Ultimately, the proposed rule change is intended to
facilitate DPM involvement in GTH and Curb sessions and is intended to
facilitate tighter spreads, increase trading opportunities, and overall
enhanced market quality to the benefit of all market participants. As
discussed above, measuring compliance with DPM continuous quoting
obligations across trading sessions is consistent with current EDGX
Rules.
The Exchange notes if a DPM in a class during RTH does not seek to
become the DPM in that class during GTH or Curb, this proposed rule
change has no impact on that DPM's obligations, as the proposed change
would only require additional quoting time for DPMs appointed to a
class in multiple trading sessions. If a DPM in a class during RTH
wants to be DPM in that class during other trading sessions, and the
Exchange makes such appointment, the Exchange believes it is
appropriate for that DPM to be subject to the same obligations during
those additional trading sessions it is during RTH.
Last, the Exchange believes that the largely administrative changes
proposed for Cboe Rule 5.50 that would (1) remove specific time
requirements from the rules and (2) return inadvertently deleted rule
text are intended to remove impediments to and perfect the mechanism of
a free and open market and a national market system and protect
investors consistent with the Act. By moving Market-Maker application
cutoff times from the rules to the Exchange's technical specification
documentation, the Exchange will have the flexibility to change times
in response to technology advances or future changes in trading times.
By returning language inadvertently deleted regarding the Exchange's
authority to change the eligible categories of Market-Maker
participants for each group, the proposed change clarifies the manner
in which the Exchange may function.
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. The proposed rule change to
clarify the Exchange's ability to appoint DPMs to all trading session
and on a trading session-by-trading session basis explicitly state what
is permissible today under current Rules, as discussed above. These
Rules will continue to apply in the same manner to all TPHs. The
proposed rule change to apply DPM quoting obligations to GTH and Curb
(and measure compliance with the continuous quoting obligation across
trading sessions) and permit the Exchange to apply the DPM
participation entitlement in GTH and Curb, will apply equally to all
DPMs (and in the same manner as they do today to DPMs during RTH).
While the proposed rule change increases the total time a DPM must
quote if it is appointed to GTH and/or Curb, this increase is de
minimis given that a DPM's compliance with its continuous quoting
obligation is based on all classes in which it has an appointment in
the aggregate across trading sessions. A Market-Maker may choose to
express interest in becoming a DPM during GTH and/or Curb. As noted
above, if a DPM in a class during RTH does not want to be DPM (or is
not appointed as DPM) in that class during GTH or Curb, this proposed
rule change has no impact on the DPM. The Exchange believes that the
slight additional burden of extending the continuous quoting obligation
to the GTH and Curb trading sessions for DPMs' appointments in those
trading sessions is outweighed by the benefits to investors that may
result from that liquidity. The proposed rule change also continues to
maintain a balance of DPM benefits and obligations, as the continuous
quoting obligation and DPM participation entitlement that will apply
during GTH and Curb are the same as those that apply today during RTH.
Additionally, the proposed changes to move time requirements to
technical specification documents and add back inadvertently removed
content are not for competitive purposes and are generally
administrative changes to support market function. The Exchange does
not believe 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 the proposed rule changes
apply only to DPMs at the Exchange.
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
Within 45 days of the date of publication of this notice in the
Federal
[[Page 6971]]
Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be 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#f587809990d8969a9898909b8186b5869096db929a83"><span class="__cf_email__" data-cfemail="c0b2b5aca5eda3afadada5aeb4b380b3a5a3eea7afb6">[email protected]</span></a>. Please include
file number SR-CBOE-2026-016 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-2026-016. 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-2026-016 and should be submitted on
or before March 6, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-02883 Filed 2-12-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on February 13, 2026.
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.