Notice2026-09742
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt a New Fee Code for Market-Maker Complex Orders Executed on the Complex Order Book That Add Liquidity in Penny Program Securities and To Amend Its Orders Submitted With a Designated Give Up Program
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Published
May 15, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 94 (Friday, May 15, 2026)</title>
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[Federal Register Volume 91, Number 94 (Friday, May 15, 2026)]
[Notices]
[Pages 28056-28059]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-09742]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105463; File No. SR-CboeBZX-2026-041]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule To Adopt a New Fee Code for Market-Maker Complex
Orders Executed on the Complex Order Book That Add Liquidity in Penny
Program Securities and To Amend Its Orders Submitted With a Designated
Give Up Program
May 12, 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 May 1, 2026, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend its Fees Schedule to adopt a new fee code for Market-Maker
Complex orders executed on the complex order book that add liquidity in
Penny Program Securities and to amend its Orders Submitted with a
Designated Give Up program. 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
[[Page 28057]]
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, effective May 1,
2026.
First, the Exchange proposes to adopt a new fee code for Market-
Maker Complex orders that trade on the BZX Options complex order book
(``COB''). Currently the Exchange applies fee code ZF to all Non-
Customer Complex orders executed on the COB that add liquidity in Penny
Program Securities \3\ and assesses a fee of $0.50 per contract. As
proposed, the Exchange would apply fee code ZI to Market-Maker 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.
For the avoidance of doubt, there is no change to the fee assessed to
Market-Maker Complex orders executed on the COB that add liquidity in
Penny Program Securities orders as result of the proposed change; the
change simply results in a different fee code being applied to such
orders.
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\3\ ``Penny Program Securities'' are those issues quoted
pursuant to Exchange Rule 21.5(d).
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As a result of the proposed change, the Exchange also proposes to
amend the Complex order Non-Customer Penny Add Volume Tier set forth in
Footnote 12. Under the Complex order Non-Customer Penny Add Volume
Tier, currently applicable to qualifying Complex Non-Customer orders in
Penny Program Securities that add liquidity yielding fee code ZF, the
Exchange assesses 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. The Exchange proposes to amend the Complex
order Non-Customer Penny Add Volume Tier to apply to qualifying Complex
Market-Maker orders in Penny Program Securities that add liquidity
yielding proposed fee code ZI.\4\ The Complex order Non-Customer Penny
Add Volume Tier currently applies to such qualifying orders; there is
no practical change as a result of the proposed change.
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\4\ The Exchange proposes to append a reference to Footnote 12
to proposed fee code ZI within the Fee Codes and Associated Fees
table.
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The Exchange also proposes to amend fee code ZF, appended to all
Non-Customer Complex orders executed on the COB that add liquidity in
Penny Program Securities and assesses a fee of $0.50 per contract, to
apply to all Non-Customer, Non-Market-Maker Complex orders executed on
the COB that add liquidity in Penny Program Securities. There are no
changes to the fee amount assessed to orders yielding fee code ZF as a
result of the proposed change.
Finally, the Exchange proposes to amend Footnote 5, which provides
that when a ``Designated Give Up'', as defined in Rule 21.12(b)(1), is
specified on an order, applicable rebates (i.e., any standard rebate or
applicable tier rebates) for orders routed to and executed on the
Exchange (yielding fee code NA, NF, NN, NY, PA, PC, PF, PN, and PY) are
provided to the Member who routed the order to the Exchange.
By way of background, Rule 21.12 provides that, in addition to its
own Clearing Member \5\ (or itself, if the firm is self-clearing), a
User \6\ may identify to the Exchange a Designated Give Up, as that
term is defined in the Rule. Specifically, Rule 21.12(b)(1) defines the
term Designated Give Up as any Clearing Member that a User (other than
a Market Maker) \7\ identifies to the Exchange, in writing, as a
Clearing Member the User requests the ability to give up. As such, a
Member acting as an options routing firm on behalf of one or more other
Exchange Members (a ``Routing Firm'') is able to route orders to the
Exchange and to immediately give up the party (a party other than the
Routing Firm itself or the Routing Firm's own clearing firm) who will
accept and clear any resulting transaction.
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\5\ A Clearing Member is defined as ``Options Member that is
self-clearing or an Options Member that clears BZX Options
Transactions for other Members of BZX Options.'' See Exchange Rule
16.1. An Option Member is defined as ``a firm, or organization that
is registered with the Exchange pursuant to Chapter XVII of these
Rules for purposes of participating in options trading on EDGX
Options as an `Options Order Entry Firm' or `Options Market
Maker.''' See Exchange Rule 16.1(a)(38).
\6\ See Exchange Rule 1.5(cc).
\7\ See Exchange Rule 1.5(l).
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The Exchange proposes to amend Footnote 5 \8\ to include orders
yielding fee codes ZA,\9\ ZB,\10\ and ZF to the list of orders to which
the Designated Give Up rebate program applies, so that applicable
rebates for orders routed to and executed on the Exchange yielding fee
codes ZA, ZB, or ZF are provided to the Member who routed the order to
the Exchange, similar to orders yielding fee codes NA, NF, NN, NY, PA,
PC, PF, PN, and PY.\11\
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\8\ As part of the proposed changs, the Exchange proposes to
append Footnote 5 to fee codes ZA, ZB, and ZF in the `Fee Codes and
Associated Fees' table of the Fees Schedule.
\9\ Fee code `ZA' applies to Complex Customer contra Non-
Customer orders in Penny Securities.
\10\ Fee code `ZB' applies to Complex Customer contra Non-
Customer orders in Non-Penny Securities.
\11\ Fee code `NA' applies to Professional orders that add
liquidity in Non-Penny Securities; fee code ` NF' applies to Firm/
Broker Dealer/Joint Back Office orders that add liquidity in Non-
Penny Securities; fee code `NN' applies to Away Market-Maker orders
that add liquidity in Non-Penny Securities; fee code `NY' applies to
Customer orders that add liquidity in Penny Securities; fee code
`PA' applies to Professional orders that add liquidity in Penny
Securities; fee code `PC' applies to Customer orders that remove
liquidity in Penny Securities; fee code `PF' applies to Firm/Broker
Dealer/Joint Back office orders that add liquidity in Penny
Securities; fee code `PN' applies to Away Market-Maker orders that
add liquidity in Penny Securities; and fee code `PY' applies to
Customer orders that add liquidity in Penny Securities.
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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. The Exchange also believes
the proposed rule change is consistent with Section 6(b)(4) of the
Act,\15\ 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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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ Id.
\15\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed changes are reasonable and
equitable. As noted above, the changes to apply fee code ZI to Market-
Maker Complex orders executed on the COB that add
[[Page 28058]]
liquidity in Penny Program Securities and assess such orders a fee of
$0.50 per contract, amend the Complex order Non-Customer Penny Add
Volume Tier to also apply to qualifying Complex Market-Maker orders in
Penny Program Securities that add liquidity yielding proposed fee code
ZI, and amend fee code ZF to apply to all Non-Customer, Non-Market-
Maker Complex orders executed on the COB that add liquidity in Penny
Program Securities are strictly administrative. The purpose of the
proposed change is to create a new fee code for Market-Maker Complex
orders executed on the COB that add liquidity in Penny Program
Securities, separate from other Non-Customer, Non-Market-Maker Complex
orders executed on the COB that add liquidity in Penny Program
Securities, to which fee code ZF will continue to apply. The Exchange
believes such changes are reasonable, as there are no changes to the
fees assessed to applicable orders, under standard transaction fees or
under the Complex order Non-Customer Penny Add Volume Tier, as a result
of the proposal. The Exchange believes its proposal is equitable and
not unreasonably discriminatory as it will apply equally to all Market-
Maker Complex orders executed on the COB that add liquidity in Penny
Program Securities, in that all orders will continue to be assessed a
standard transaction of fee of $0.50 per contract and be eligible for
the Complex order Non-Customer Penny Add Volume Tier. Similarly, all
Non-Customer, Non-Market-Maker Complex orders executed on the COB that
add liquidity in Penny Program Securities and yield fee code ZF will
continue to be assessed a standard transaction of fee of $0.50 per
contract and be eligible for the Complex order Non-Customer Penny Add
Volume Tier.
The Exchange believes the proposed changes to the Orders Submitted
with a Designated Give Up program is reasonable and equitable. Because
the Routing Firm is responsible for the decision to route orders
yielding fee codes ZA, ZB, and ZF to the Exchange, the Exchange
believes that such Member should be provided the rebate when such
orders are executed, similar to other Non-Market-Maker orders that
currently fall under the program (i.e., orders yielding fee codes NA,
NF, NN, NY, PA, PC, PF, PN, and PY). The Exchange notes that the U.S.
options markets are highly competitive, and the proposed fee structure
is intended to provide an incentive for Members to direct Complex
orders to the Exchange. The proposal would only apply to fee codes ZA,
ZB, and ZF, (in addition to fee codes NA, NF, NN, NY, PA, PC, PF, PN,
and PY currently eligible) related to Non-Market-Maker order flow,
because these reflect the primary liquidity that the Exchange is
seeking to attract from Routing Firms that are able to identify
Designated Give Ups.\16\ The Exchange believes that the proposed
amendments to its fee schedule will enhance the Exchange's competitive
position and will result in increased liquidity on the Exchange, to the
benefit of all Exchange participants. Therefore, the Exchange believes
that providing rebates is equitable and reasonable and not unfairly
discriminatory as it would allow the Exchange, in the context of the
its established give up procedure described above, to provide a rebate
directly to the party making the routing decision to direct certain
orders to the Exchange (i.e., the Routing Firm), which is consistent
with both the Exchange's historic practice and the purpose behind a
rebate (i.e., to incentivize the order being directed to the Exchange).
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\16\ The Exchange notes that Market-Makers may only give up its
respective Guarantor, as defined by Rule 21.12(b)(2). See Cboe BZX
Options Rule 21.12(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
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 related to the adoption of a new fee code
for Market-Maker Complex orders executed on the COB that add liquidity
in Penny Program Securities, separate from other Non-Customer, Non-
Market-Maker Complex orders executed on the COB that add liquidity in
Penny Program Securities will impose any burden on intramarket or
intermarket competition. As noted above, the proposed changes are
strictly administrative. There are no changes to the fees assessed to
applicable orders, under standard transaction fees or under the Complex
order Non-Customer Penny Add Volume Tier, as a result of the proposal.
Further, the changes will apply equally to all Market-Maker Complex
orders executed on the COB that add liquidity in Penny Program
Securities, in that all orders will continue to be assessed a standard
transaction of fee of $0.50 per contract and be eligible for the
Complex order Non-Customer Penny Add Volume Tier. Similarly, all Non-
Customer, Non-Market-Maker Complex orders executed on the COB that add
liquidity in Penny Program Securities and yield fee code ZF will
continue to be assessed a standard transaction of fee of $0.50 per
contract and be eligible for the Complex order Non-Customer Penny Add
Volume Tier.
The Exchange does not believe that the proposed changes to the
Orders Submitted with a Designated Give Up program will impose any
burden on intramarket competition. As noted above, because the Routing
Firm is responsible for the decision to route orders yielding fee codes
ZA, ZB, and ZF to the Exchange, the Exchange believes that such Member
should be provided the rebate when such orders are executed, similar to
other Non-Market-Maker orders that currently fall under the program.
The proposed change would allow the Exchange, in the context of the its
established give up procedure described above, to provide a rebate
directly to the party making the routing decision to direct certain
orders to the Exchange (i.e., the Routing Firm), which is consistent
with both the Exchange's historic practice and the purpose behind a
rebate (i.e., to incentivize the order being directed to the Exchange).
The Exchange also does not believe that the proposed changes to the
Orders Submitted with a Designated Give Up program will impose any
burden on intermarket competition. The Exchange notes that the U.S.
options markets are highly competitive, and the proposed fee structure
is intended to provide an incentive for Members to direct Complex
orders to the Exchange. Additionally, Members may opt to disfavor the
Exchange's pricing if they believe that alternatives offer them better
value. The Exchange believes that its proposal to incentivize Routing
Firms that are utilizing the new give up procedure to direct orders to
the Exchange, and will enhance the Exchange's competitive position by
resulting in increased liquidity on the Exchange, thereby providing
more of an opportunity for customers to receive best executions.
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)
[[Page 28059]]
of the Act \17\ and paragraph (f) of Rule 19b-4 \18\ 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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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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#fb898e979ed6989496969e958f88bb889e98d59c948d"><span class="__cf_email__" data-cfemail="87f5f2ebe2aae4e8eaeae2e9f3f4c7f4e2e4a9e0e8f1">[email protected]</span></a>. Please include
file number SR-CboeBZX-2026-041 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-2026-041. 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-2026-041 and should be submitted
on or before June 5, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-09742 Filed 5-14-26; 8:45 am]
BILLING CODE 8011-01-P
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