Notice2026-07043
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Rule 5.1 to Permit the Exchange to List Binary Options on Exclusively Listed Index Options Designated for Trading Under Chapter 4, Section B During Global Trading Hours (“GTH”) and Curb Trading Hours (“Curb”)
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
April 13, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 70 (Monday, April 13, 2026)</title>
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[Federal Register Volume 91, Number 70 (Monday, April 13, 2026)]
[Notices]
[Pages 18899-18902]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07043]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105181; File No. SR-CBOE-2026-028]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Amend
Rule 5.1 to Permit the Exchange to List Binary Options on Exclusively
Listed Index Options Designated for Trading Under Chapter 4, Section B
During Global Trading Hours (``GTH'') and Curb Trading Hours (``Curb'')
April 8, 2026.
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 March 27, 2026, 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 Rule 5.1 to permit the Exchange to list binary options \3\ on
exclusively listed index options designated for trading under Chapter
4, Section B during Global Trading Hours (``GTH'') and Curb Trading
Hours (``Curb''). The text of the proposed rule change is provided in
Exhibit 5.
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\3\ The term ``binary option'' means a European-style option
contract having an exercise settlement amount that is established at
the creation of the option. Binary options are paid out if
settlement value of the underlying broad-based index equals, exceeds
or is less than the exercise price, depending on the type of option
(i.e., call or put). See Rule 4.16(b) (definition of ``binary
option'').
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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 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 Rule 5.1 to permit the Exchange to
list binary options on exclusively listed index options designated for
trading under Chapter 4, Section B during GTH and Curb.
By way of background, Rule 5.1(c) provides that the Exchange may
designate as eligible for trading during GTH \4\ any exclusively listed
index option \5\ designated for trading under Chapter 4, Section B.
Currently, options on S&P 500 Stock Index (``SPX''), Cboe Volatility
Index (``VIX''), Mini-SPX Index (``XSP''), Russell 2000 Index
(``RUT''), Mini-RUT Index (``MRUT''), Cboe Magnificent 10 Index
(``MGTN''), Cboe Bitcoin U.S. ETF Index (``CBTX''), andCboe Mini
Bitcoin U.S. ETF Index (``MBTX'') are approved for trading during GTH.
Further, under Rule 5.1(c), if the Exchange designates a class of index
options as eligible for trading during GTH, FLEX Options with the same
underlying index are also deemed eligible for trading during GTH.
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\4\ 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).
\5\ An ``exclusively listed option'' is an option that trades
exclusively on an exchange because the exchange has an exclusive
license to list and trade the option or has the proprietary rights
in the interest underlying the option. An exclusively listed option
is different than a ``singly listed option,'' which is an option
that is not an ``exclusively listed option'' but that is listed by
one exchange and not by any other national securities exchange.
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Rule 5.1(d) provides that the Exchange may designate as eligible
for trading during Curb \6\ any exclusively listed option that the
Exchange has designated for trading under Chapter 4, Section B.
Currently SPX, VIX, XSP, RUT, MRUT, and MGTN options are approved for
trading during Curb. Further, under Rule 5.1(d), if the
[[Page 18900]]
Exchange designates a class of index options as eligible for trading
during Curb, FLEX Options with the same underlying index are also
deemed eligible for trading during Curb.
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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(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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By way of further background, the Exchange originally adopted the
GTH trading session due to global demand from investors to trade SPX
and VIX options, as alternatives for hedging and other investment
purposes, particularly as a complementary investment tool to VIX
futures.\7\ In response to customer demand for additional options to
trade during the GTH trading session for similar purposes, the Exchange
later designated XSP options to be eligible for trading during GTH.\8\
The Exchange later adopted a Curb trading session, to further maximize
the overlap in time that such designated options could trade.
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\7\ See Securities Exchange Act Release No. 34-73017 (September
8, 2014), 79 FR 54758 (September 12, 2014) (SR-CBOE-2014-062).
\8\ See Securities Exchange Act Release No. 34-75914 (September
14, 2015), 80 FR 56522 (September 18, 2015) (SR-CBOE-2015-079).
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The Exchange now proposes to permit the Exchange to list binary
options on exclusively listed index options designated for trading
under Chapter 4, Section B during GTH and Curb. The proposed rule
change amends Rules 5.1(c) and (d) to state that if the Exchange
designates a class of index options as eligible for trading during GTH
or Curb, respectively, FLEX Options and binary options with the same
underlying index are also deemed eligible for trading during GTH or
Curb, respectively.
The Exchange may approve for listing and trading binary option
contracts on a broad-based index selected in accordance with Rule 4.10
and the Interpretations and Policies thereunder.\9\ Pursuant to Rule
5.1(b)(2)(G), Regular Trading Hours (``RTH'') \10\ for binary index
options are the same as RTH for options on the same underlying index.
Under the proposed rule change, if the Exchange designates a class of
broad-based index options as eligible for GTH or Curb trading, binary
options on the same underlying index are automatically deemed eligible
for the same extended hours, similar to how FLEX Options are considered
under current rules. This proposed change merely extends the hours
during which binary index options may trade on the Exchange; it does
not alter the underlying eligibility criteria. The Exchange believes
there is demand from investors for binary options with the same
underlying as options that currently trade during GTH and Curb,
particularly given the availability of competitive products nearly 24
hours a day (as further discussed below).
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\9\ See Rule 4.16(c)(1). Binary options are a separate class
from other options overlying the same broad-based index. The
maintenance listing standards with respect to options on broad-based
indexes set forth in Rule 4.10 and the Interpretations and Policies
thereunder apply to binary options on broad-based indexes as well.
See Rule 4.16(d).
\10\ Rule 5.1(b)(2) defines RTH for index options as 9:30 a.m.
to 4:15 p.m. (Eastern Time), subject to certain exceptions.
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As noted above, Rules 5.1(c) and (d) permit the Exchange to
designate any exclusively listed index option eligible under Chapter 4,
Section B as eligible for GTH and Curb trading; currently, SPX, VIX,
XSP, RUT, and MRUT options are the broad-based index options approved
for trading during GTH and Curb. Thus, under the proposed rule change,
binary options on SPX, VIX, XSP, RUT, and MRUT would be eligible for
GTH and Curb trading.
With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it believes that
the Exchange has the necessary systems capacity to handle any potential
additional traffic associated with trading of binary options on
exclusively listed index options designated for trading under Chapter
4, Section B during GTH and Curb. The Options Price Reporting Authority
(``OPRA'') also informed the Exchange it believes it has the necessary
systems capacity to handle the additional traffic associated with the
listing of binary options that would result from this proposed rule
change.
The Exchange does not believe that its Trading Permit Holders
(``TPHs'') will experience any capacity issues as a result of this
proposal and represents that it will monitor the trading volume
associated with any binary options series listed as a result of this
proposal and the effect (if any) of these series on market
fragmentation and on the capacity of the Exchange's automated systems.
For its initial binary options launch, the Exchange intends to list the
same strikes during GTH as are listed during RTH.
In addition to this, the Exchange believes that its existing
surveillance and reporting safeguards in place are adequate to deter
and detect possible manipulative behavior which might arise from
listing and trading binary options on exclusively listed index options
designated for trading under Chapter 4, Section B during GTH and Curb.
Furthermore, during GTH and Curb, binary options would trade in
accordance with applicable Exchange Rules including governing customer
accounts, position and exercise limits, margin requirements and trading
halt procedures, among other Rules, which are designed to prevent
fraudulent and manipulative acts and practices. Clearing of the binary
options as proposed will be supported by current Options Clearing
Corporation processes. The proposed rule change makes no changes to the
trading rules applicable to GTH or Curb.\11\
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\11\ For example, business conduct rules in Chapter 8 and rules
related to doing business with the public in Chapter 9 will continue
to apply during the GTH session. Additionally, a broker-dealer's due
diligence and best execution obligations apply during the GTH
trading session. As there will still be no open outcry trading on
the floor during the GTH trading, Chapter 5, Section G will continue
not to apply as such rules pertain to manual order handling and
open-outcry trading.
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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.\12\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \13\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
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In particular, the Exchange believes the proposed rule change will
facilitate transactions in securities, 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.
Specifically, the proposed rule change extends to binary broad-based
index options the same GTH and Curb trading eligibility already
available to exclusively listed standard broad-based index options on
the same underlying indexes, similar to how FLEX Options are considered
under current rules. Additionally, the proposed rule change
[[Page 18901]]
will permit the Exchange to list binary options overlying broad-based
indexes with more overlapping hours on a national securities exchange
as alternatives to products that are structured in substantially the
same manner as binary options currently available on other platforms.
Various market platforms that are not registered as national securities
exchanges currently offer products structured in substantively the same
manner as binary options on broad-based indexes that the Exchange may
list pursuant to current Rules. These platforms are open 24 hours a
day, seven days a week, and offer binary option products overlying
securities indexes. However, as these venues are not national
securities exchanges, they do not offer investors the benefits of
centralized liquidity, market transparency, or securities regulations
intended to protect investors. The Exchange believes listing
competitive products on a securities exchange during additional hours
may will offer investors an alternative to trade these products outside
of the regular trading day in a centralized, regulated, and
standardized marketplace, which promotes price discovery and
transparency. The Exchange believes its proposal would contribute to
leveling the playing field with these alternative markets.
As noted above, the proposed change does not alter the criteria by
which the Exchange designates index options as eligible for trading
during GTH or Curb, nor does it alter the underlying eligibility
criteria for binary index options. Rather, the proposed change ensures
that binary index options, which already share the same RTH as
corresponding options on the same underlying index,\15\ are treated
consistently with respect to GTH and Curb trading designations.
Extending GTH and Curb eligibility to binary index options on the same
underlying broad-based indexes promotes consistency across products and
provides market participants with a more uniform trading experience.
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\15\ See Rule 5.1(b)(2)(G).
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The listing of binary options for trading during GTH and Curb will
provide more investment opportunities within the options trading
industry that is consistent with the continued globalization of the
securities markets. Extending the timeframe in which investors may
trade eligible binary options is designed to provide investors with the
ability to manage risk more efficiently, react to global macroeconomic
events as they are happening and adjust binary options positions nearly
around the clock.
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 proposed rule change
applies uniformly to all binary index options on any underlying index
for which the Exchange has designated a corresponding class of index
options as eligible for GTH or Curb trading. If the Exchange determines
to list eligible binary options for trading during GTH and Curb, all
TPHs will be able, but not be required, to trade such binary options
during GTH and Curb trading sessions. The proposed rule change is
merely extending the permissible trading hours of a product that may
trade on the Exchange during RTH.
The Exchange 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 because provides
the Exchange may only designate certain exclusively listed index
options as eligible for trading during GTH or Curb. As such, any binary
options eligible for trading during GTH or Curb as a result of the
proposed rule change would be proprietary Exchange products. To the
extent that listing such binary options on the Exchange during GTH and
Curb may make the Exchange a more attractive marketplace to market
participants at other exchanges, such market participants are free to
elect to become market participants on the Exchange. Other exchanges
are free to update their rules to permit extended trading hours in
products that trade on their markets.
Ultimately, the proposal is designed to increase competition for
order flow in binary options. As noted above, substantively similar
products to binary broad-based index options are available on various
other markets, which make their products available 24 hours a day. The
proposed rule change will permit the Exchange to list binary options on
the same underlying indexes as these markets during extended trading
hours (nearly 24 hours a day, five days a week) that further overlap
with the hours of those markets, which will ultimately promote
competition by offering investors an additional venue to trade these
products outside of the regular trading day.
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
Because the foregoing proposed rule change does not:
A. significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \16\ and
Rule 19b-4(f)(6) \17\ 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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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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#453730292068262a2828202b3136053620266b222a33"><span class="__cf_email__" data-cfemail="7200071e175f111d1f1f171c0601320117115c151d04">[email protected]</span></a>. Please include
file number SR-CBOE-2026-028 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.
[[Page 18902]]
All submissions should refer to file number SR-CBOE-2026-028. 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-2026-028 and should be submitted on
or before May 4, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07043 Filed 4-10-26; 8:45 am]
BILLING CODE 8011-01-P
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