Notice2026-10951
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Allow for Extended Trading of Multi-Listed Equity Options
Primary source
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Published
June 2, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 105 (Tuesday, June 2, 2026)</title>
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[Federal Register Volume 91, Number 105 (Tuesday, June 2, 2026)]
[Notices]
[Pages 33005-33010]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10951]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105569; File No. SR-CBOE-2025-079]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, To
Allow for Extended Trading of Multi-Listed Equity Options
May 28, 2026.
I. Introduction
On September 30, 2025, Cboe Exchange, Inc. (``Exchange'' or
``Cboe'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to allow for extended trading sessions of multi-
listed equity options that meet certain eligibility criteria. The
proposed rule change was published for comment in the Federal Register
on October 3, 2025.\3\ On November 3, 2025, pursuant to Section
19(b)(2) of the Act,\4\ the Commission designated a longer period
within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ On December 23, 2025, the
Commission instituted proceedings under Section 19(b)(2)(B) of the Act
to determine whether to approve or disapprove the proposed rule
change.\6\ On March 23, 2026, pursuant to Section 19(b)(2) of the
Act,\7\ the Commission designated a longer period within which to
approve or disapprove the proposed rule change.\8\ On April 2, 2026,
the Exchange filed Amendment No. 1 to the proposed rule change, which
superseded the proposed rule change as originally filed and replaced it
in its entirety.\9\ The proposed rule change, as modified by Amendment
No. 1, was published for comment in the Federal Register on April 9,
2026.\10\ The Commission received comments on the proposed rule
change.\11\ This order approves the proposed rule change, as modified
by Amendment No. 1.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104160 (Sep. 30,
2025), 90 FR 48091 (``Notice'').
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 104173, 90 FR 51424
(Nov. 17, 2025).
\6\ See Securities Exchange Act Release No. 104509, 90 FR 61454
(Dec. 31, 2025).
\7\ 15 U.S.C. 78s(b)(2).
\8\ See Securities Exchange Act Release No. 105063, 91 FR 14730
(Mar. 26, 2026).
\9\ See <a href="https://www.sec.gov/comments/SR-CBOE-2025-079/srcboe2025079-740147-2298235.pdf">https://www.sec.gov/comments/SR-CBOE-2025-079/srcboe2025079-740147-2298235.pdf</a>.
\10\ See Securities Exchange Act Release No. 105153 (Apr. 6,
2026), 91 FR 18010 (``Amendment No. 1''). Amendment No. 1 provides
additional detail regarding and support for the proposal. In
addition, Amendment No. 1 revises the proposal such that it: (1)
classifies the proposed extended afternoon session of 4:00-4:15 p.m.
as a ``Curb'' session (instead of as a ``GTH'' session as initially
proposed), and makes related rule text changes regarding series
eligibility; (2) sets forth a selection and removal process for the
equity options that may be traded on the Exchange during the
proposed extended trading sessions; (3) describes when the Exchange
would disseminate opening auction updates; (4) specifies when FLEX
equity option orders may be submitted; (5) extends the Exchange's
order routing processes to the proposed extended morning session;
and (6) updates the Exchange's Global Trading Hours and Curb Trading
Hours Disclosure.
\11\ All comments received by the Commission on the proposed
rule change are available on the Commission's website at: <a href="https://www.sec.gov/rules-regulations/public-comments/sr-cboe-2025-079">https://www.sec.gov/rules-regulations/public-comments/sr-cboe-2025-079</a>.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1 <SUP>12</SUP>
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\12\ The Exchange sets forth additional detail and justification
regarding the proposal in Amendment No. 1. See supra note 10.
Capitalized terms not defined herein are defined in the Exchange's
rules.
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Currently, the Exchange offers three trading sessions: (i) Regular
Trading Hours (``RTH''); \13\ (ii) Curb Trading Hours (``Curb''); \14\
and (iii) Global Trading Hours (``GTH'').\15\ Multi-listed equity
options currently may trade on the Exchange only during RTH, from 9:30
a.m. through 4:00 p.m.,\16\ except equity options overlying certain
designated Exchange Traded Funds (``ETFs''), Exchange Traded Notes
(``ETNs''), Index Portfolio Shares, Index Portfolio Receipts, and Trust
Issued Receipts (collectively herein, ``ETP options'') are eligible to
trade until 4:15 p.m. as part of RTH.\17\ The Exchange's exclusively-
listed index options, by contrast, currently may trade during GTH and
Curb, in addition to during RTH.\18\
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\13\ RTH occurs from 9:30 a.m. to 4:00 p.m. or 4:15 p.m.,
depending on the specific security, Monday through Friday. See Rule
5.1(b)(1). All times referenced are Eastern Time, unless otherwise
specifically noted.
\14\ The current Curb session occurs from 4:15 p.m.to 5:00 p.m.,
Monday through Friday. See Rule 5.1(d).
\15\ The current GTH session occurs from 8:15 p.m. to 9:25 a.m.
the next day, Monday through Friday. See Rule 5.1(c).
\16\ See Amendment No. 1, supra note 10, at 18011.
\17\ See Rule 5.1(b)(1).
\18\ See Rule 5.1(c)-(d). Currently, options on the S&P 500
Index, CBOE Volatility Index, Cboe Mini SPX Index Options, Russell
2000 Index, Mini-Russell 2000 Index, and Cboe Magnificent 10 Index
are approved for trading during GTH and Curb. See id.
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As discussed more fully in Amendment No. 1, the Exchange proposes
to amend Rule 5.1(c) to
[[Page 33006]]
provide for extended trading sessions for multi-listed equity options
that meet certain eligibility criteria, as well as for FLEX options
overlying the same equity.\19\ The Exchange would permit trading Monday
through Friday in designated equity options before and after RTH.\20\
The proposed extended morning trading session, which the Exchange would
classify as a GTH session, would occur from 7:30 a.m. to 9:25 a.m.\21\
The proposed extended afternoon session, which the Exchange would
classify as a Curb session, would occur immediately after RTH for
equity options (that are not ETP options that already trade until 4:15
p.m. as part of RTH), from 4:00 p.m. to 4:15 p.m.\22\ The Exchange
states that equity trading already occurs outside of regular market
hours on equity exchanges, but because equity option trading hours have
not changed, investors are unable to access the options markets during
the extended trading hours when equities may trade, which limits
investors' ability to hedge equity transactions with options or utilize
options for other investment purposes or strategies.\23\ The Exchange
also believes that the proposed extended trading sessions will make
equity options trading more accessible to investors in other countries
and to U.S. investors who wish to trade options in expanded trading
sessions alongside the underlying equities.\24\
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\19\ See proposed Rule 5.1(c).
\20\ See id.
\21\ See id. The Exchange proposes to add references to equity
options and Rule 4.5 (Series of Options Contracts Open for Trading)
to current Rule 5.1(c)(2) in order to facilitate the trading of any
series in eligible equity option classes that trade during the
proposed GTH session. Furthermore, the Exchange proposes a technical
change to renumber current Rules 5.1(c)(2), (3), and (4) as Rules
5.1(c)(3), (4), and (5), respectively, because, as further explained
below, the Exchange proposes to add a new Rule 5.1(c)(2).
\22\ See proposed Rule 5.1(d). The Exchange also proposes to add
references to equity options and Rule 4.5 to current Rule 5.1(d)(2)
in order to facilitate the trading of any series in eligible equity
option classes that trade during the proposed Curb session.
Furthermore, the Exchange proposes a technical change to renumber
current Rules 5.1(d)(2), (3), and (4) as Rules 5.1(d)(3), (4), and
(5), respectively, because, as further explained below, the Exchange
proposes to add a new Rule 5.1(d)(2).
\23\ See Amendment No. 1, supra note 10, at 18012.
\24\ See id. The Exchange states that, whereas certain
processing aspects of GTH and Curb for equity options require
explicit additions to the Exchange's rules, other GTH and Curb
trading rules as currently stated would apply to equity options
designated for trading in the proposed extended sessions. These
rules cover, among other things, (i) electronic-only trading in GTH
and Curb sessions, (ii) participation requirements, (iii) obvious
errors, (iv) auction functionality, (v) risk controls, (vi)
unavailability of market orders, (vii) market maker obligations, and
(viii) utilization of existing series listing criteria. See
Amendment No. 1, supra note 10, at 18017.
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The Exchange proposes eligibility criteria that must be satisfied
by each class of equity options made available for trading during the
proposed extended trading sessions, as well as a cap on the total
number of eligible classes that may be made available. Specifically,
under proposed Rules 5.1(c)(2) and 5.1(d)(2),\25\ the Exchange may
designate for trading during the proposed GTH and Curb sessions up to
100 actively-traded, equity option classes that meet the following
minimum criteria for the preceding six calendar months: (i) the option
has an average daily volume of 150,000 contracts, (ii) the equity
security underlying the option has a $50 billion market capitalization,
and (iii) the equity security underlying the option has an average
daily trading volume of 10 million shares.\26\ The Exchange may also
designate for trading during the proposed GTH and Curb sessions any
equity option that is traded on another exchange during GTH or any
other trading session that is not RTH; any such equity option would not
be subject to the 100-class limit.\27\ Moreover, if the Exchange
designates a class of equity options as eligible for trading during the
proposed GTH and Curb sessions, FLEX options with the same underlying
equity security also would be deemed eligible for the proposed extended
trading sessions.\28\
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\25\ Proposed Rule 5.1(c)(2) sets forth the eligibility criteria
for equity options to trade during the proposed GTH session, and
proposed Rule 5.1(d)(2) permits the Exchange to designate as
eligible for trading during the proposed Curb session any option
that the Exchange designates to trade during the proposed GTH
session pursuant to proposed Rule 5.1(c)(2).
\26\ See proposed Rule 5.1(c)(2). See also Amendment No. 1,
supra note 10, at 18013-14.
\27\ See proposed Rule 5.1(c)(2).
\28\ See id.
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The Exchange would undertake a periodic review of the proposed
eligibility criteria and, if necessary, remove equity options from the
proposed GTH and Curb sessions that no longer meet the criteria.\29\
Specifically, the Exchange would engage in a semiannual review
process--with two review cycles occurring as of January 1 and July 1 of
each year--and utilize trading data from the previous six-month period
to determine the equity option classes that meet the requirements of
proposed Rule 5.1(c)(2).\30\ Eligible equity option classes designated
by the Exchange would be permitted to commence trading during the
proposed GTH and Curb sessions on the first trading day of February and
August, respectively.\31\
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\29\ See proposed Rules 5.1(c)(2) and 5.1(d)(2). See also
Amendment No. 1, supra note 10, at 18014. Proposed Rule 5.1(c)(2)
sets forth the review process for the proposed GTH session, and
pursuant to proposed Rule 5.1(d)(2), the same review process would
apply for the proposed Curb session.
\30\ See proposed Rules 5.1(c)(2)(A) and 5.1(d)(2). See also
Amendment No. 1, supra note 10, at 18014. For the initial process to
determine the equity options that meet the eligibility criteria, the
Exchange would utilize data from the nearest six-month period ending
either June 30 or December 31 prior to the launch of equity options
trading in the proposed GTH and Curb sessions. See Amendment No. 1,
supra note 10, at 18014.
\31\ See Amendment No. 1, supra note 10, at 18014.
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If the Exchange determines that an equity option class trading
during the proposed GTH and Curb sessions no longer meets the
eligibility criteria, the Exchange would impose an up-to-18-month
removal process.\32\ Specifically, under the proposal: (i) the equity
option class may continue to trade in the proposed GTH and Curb
sessions for up to 18 months from the date of such determination, and
the Exchange would establish and provide reasonable advanced notice of
the date on which the equity option class would be removed from trading
in the proposed sessions (``removal date''), after which the equity
option class may only trade in RTH; (ii) if, before the removal date,
the Exchange determines that limited market activity in the equity
option class during the proposed GTH session warrants an accelerated
removal date, the Exchange may set a new, accelerated removal date and
will provide at least seven days' advance notice of the new removal
date; and (iii) notwithstanding the above, if, before the removal date,
the Exchange determines pursuant to a semiannual review that the equity
option class again meets the eligibility criteria, the removal date
will no longer apply to the option class, and the option class may
continue to trade in the proposed GTH and Curb sessions.\33\ The
Exchange also reserves the discretion to remove an option class from
the proposed GTH and Curb sessions for reasons other than those
described above, and it proposes to provide at least 30 days' advance
notice of such determination prior to the removal date.\34\ But if the
Exchange determines that immediate removal is necessary in the interest
of investor protection or the maintenance of fair and orderly markets,
the Exchange may remove an equity options class from the proposed GTH
and Curb sessions at any time and will provide notice of such
determination as soon as practicable.\35\
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\32\ See proposed Rules 5.1(c)(2)(B)-(C) and 5.1(d)(2). See also
Amendment No. 1, supra note 10, at 18014-15.
\33\ See proposed Rules 5.1(c)(2)(B) and 5.1(d)(2).
\34\ See proposed Rules 5.1(c)(2)(C) and 5.1(d)(2).
\35\ See id.
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[[Page 33007]]
In addition to the proposed changes to Rules 5.1(c) and 5.1(d), the
Exchange proposes rule amendments to support the proposed GTH and Curb
trading for equity options. The Exchange proposes to amend Rule 5.1(e)
to specify that, unlike GTH for index options, GTH for equity options
will not occur on a holiday.\36\ Further, the Exchange proposes to
amend the opening auction process in Rule 5.31 to incorporate GTH for
equity options.\37\ Rule 5.31(b) currently provides that the queuing
period for GTH for All Sessions Classes \38\ begins at 8:00 p.m., 15
minutes prior to the commencement of GTH. The Exchange proposes to
amend this rule to apply the existing queuing period beginning at 8:00
p.m. to index options and establish a new queuing period for equity
options in GTH that would commence at 7:15 a.m., which would be 15
minutes prior to the commencement of the GTH session.\39\ The Exchange
further proposes to amend Rule 5.31(d) to establish Opening Rotation
Triggers processing for GTH equity options by duplicating the existing
Opening Rotations Triggers processing for RTH equity options.\40\
Additionally, the Exchange proposes to amend Rule 5.31(c) to specify
that existing rule text stating that opening auction updates may begin
after 8:00 p.m. (previous day) for GTH trading is applicable for index
options, and to establish 7:15 a.m. as the time after which opening
auction updates may be disseminated for equity options during the
proposed GTH session.\41\
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\36\ See Amendment No. 1, supra note 10, at 18016. Similarly,
Rule 5.1(e) already states that there is no Curb Trading Hours on
domestic and international holidays, and these provisions would also
apply to equity options.
\37\ See id. The Opening Auction Process is not applicable to
the Curb session for equity options. See id.
\38\ See Rule 1.1 (defining the term ``All Sessions Class'' as
an options class that the Exchange lists for trading during all
trading sessions).
\39\ See Amendment No. 1, supra note 10, at 18016-17.
\40\ See id.
\41\ See id.
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The Exchange also proposes to amend its rules to address order
routing away from the Exchange during the proposed GTH and Curb
sessions.\42\ The Exchange states that its system is designed, at all
times, to prevent trade-throughs and avoid displaying locked or crossed
markets in accordance with the Linkage Plan.\43\ As proposed, Users'
orders in equity options designated for trading during the proposed
extended sessions would be eligible for routing just as they are during
RTH.\44\ Specifically, the Exchange proposes to amend Rule 5.36(a) to
change the time when the order routing process is first available from
9:30 a.m. to ``market open.'' \45\ This proposed change is designed to
enable Users to designate an order for routing (or not available for
routing) during all trading sessions for equity options.\46\
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\42\ See proposed Rule 5.36. The Options Order Protection and
Locked/Crossed Market Plan (``Linkage Plan'') requires U.S. options
exchanges to establish a framework for providing order protection
and addressing locked and crossed markets in eligible options
classes. The Linkage Plan is a national market system plan approved
by the Commission pursuant to Section 11A of the Act and Rule 608
thereunder. See 15 U.S. C. 78k-1; 17 CFR 242.608. The full text of
the Linkage Plan is available at <a href="https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf">https://www.theocc.com/getcontentasset/7fc629d9-4e54-4b99-9f11-c0e4db1a2266/dfc3d011-8f63-43f6-9ed8-4b444333a1d0/options_order_protection_plan.pdf</a>.
\43\ See Amendment No. 1, supra note 10, at 18016.
\44\ See id. See also Rule 1.1 (stating that the term ``User''
means any Trading Permit Holders (``TPHs'') or Sponsored User who is
authorized to obtain access to the System pursuant to Rule 5.5).
\45\ See proposed Rule 5.36(a).
\46\ See Amendment No. 1, supra note 10, at 18016.
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The Exchange also proposes to amend its rules regarding FLEX
options.\47\ The Exchange proposes to amend Rule 5.71(b)(2) to specify
that existing rule text stating that FLEX orders may be submitted after
8:15 p.m. (previous day) is applicable to FLEX orders for an index
option, and to establish that an order for an equity FLEX option that
is designated to trade during the proposed GTH session may be submitted
after 7:30 a.m.\48\ Similarly, the Exchange proposes to amend Rule
5.71(b)(3) to specify that existing rule text stating that FLEX orders
may be submitted after 4:15 p.m. is applicable to FLEX orders for an
index option, and to establish that an order for a FLEX equity option
that is designated to trade during the proposed Curb session may be
submitted after 4:00 p.m.\49\
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\47\ See Rule 5.71 (Opening of FLEX Trading).
\48\ See proposed Rule 5.71(b)(2). See also Amendment No. 1,
supra note 10, at 18015-16.
\49\ See proposed Rule 5.71(b)(3).
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Finally, Rule 9.20 provides required disclosures that a Trading
Permit Holder must make to a customer prior to the customer trading
during GTH and Curb. The Exchange proposes to update the rule to: (1)
specify that existing references to the absence of an updated
underlying index or portfolio value or intraday indicative value, and
lack of regular trading in the securities underlying the index or
portfolio apply to index options during GTH and Curb; and (2) add new
references to the absence of an underlying price or lack of regular
trading in the underlying equity for equity options trading in the
proposed GTH and Curb sessions.\50\
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\50\ See Amendment No. 1, supra note 10, at 18017.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the Exchange's
proposed rule change, as modified by Amendment No. 1 (``Amended
Proposal''), is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\51\ In particular, the Commission finds that the Amended
Proposal is consistent with Section 6(b)(1) of the Act,\52\ which
requires, among other things, that the Exchange be so organized and
have the capacity to be able to carry out the purposes of the Act and
to comply, and to enforce compliance by its members and persons
associated with its members, with the provisions of the Act, Commission
rules and regulations thereunder, and its own rules; Section 6(b)(5) of
the Act,\53\ which requires, among other things, that the rules of a
national securities exchange be designed to promote just and equitable
principles of trade, foster cooperation and coordination with persons
engaged in regulating, clearing, settling, processing information with
respect to and facilitating 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; and Section 6(b)(8) of the Act,\54\ which requires
that the rules of a national securities exchange not impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of the Act.
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\51\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\52\ 15 U.S.C. 78f(b)(1).
\53\ 15 U.S.C. 78f(b)(5).
\54\ 15 U.S.C. 78f(b)(8).
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The Amended Proposal is novel in that no national securities
exchange currently permits pre-RTH trading of multi-listed equity
options or post-RTH trading of multi-listed equity options that are not
ETP options. Even though equity securities are exchanged-traded outside
of RTH,\55\ investors currently are unable to engage in exchange
trading outside of RTH to utilize equity option trading strategies,
including to hedge equity positions and mitigate downside risk in those
positions.\56\ By extending the availability of equity options trading
on the Exchange so that it begins at 7:30 a.m. and ends at 4:15 p.m.,
the Amended Proposal is reasonably designed to expand access to equity
[[Page 33008]]
options as a tool for risk mitigation and help investors protect
existing equity positions against price movements.
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\55\ See Amendment No. 1, supra note 10, at 18012.
\56\ See id.
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In addition, the Amended Proposal sets forth a measured approach
for extending the Exchange trading sessions that are available for
equity options, which is consistent with the Act.\57\ Currently, the
earliest available extended trading sessions for equity securities on
national securities exchanges commence at 4:00 a.m. and conclude at
8:00 p.m.\58\ The Exchange has proposed significantly shorter
timeframes for the proposed GTH and Curb sessions, which the Exchange
states is appropriate because of the lack of industry experience with
extended trading sessions for equity options.\59\ The Exchange states
that limiting the proposed trading windows would allow for a paced
introduction of these types of trading sessions for equity options.\60\
The Exchange also states that the limited timeframes will allow it to
monitor and assess the development and functioning of the proposed GTH
and Curb sessions for equity options.\61\
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\57\ See id.
\58\ See id. at 18013.
\59\ See id.
\60\ See id.
\61\ See id. The Exchange further states that it has discussed
the proposal with numerous market participants, and, based on such
discussions, it believes that market-makers, clearing firms, and
other market participants can support the proposed trading
timeframes from a personnel coverage perspective. See id.
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The Amended Proposal also is measured with respect to the equity
option classes that would be available for trading during the
Exchange's proposed extended trading sessions. Only highly liquid
equity option classes that meet the eligibility criteria set forth in
proposed Rules 5.1(c)(2) and (d)(2) would be available for trading
during the proposed extended trading sessions. The Amended Proposal
also caps the number of eligible equity option classes that would be
available at 100, subject to another exchange offering extended trading
of an equity option class that the Exchange has not offered, in which
case the Exchange could add that class without it counting against the
100 class cap.\62\ Moreover, the Amended Proposal sets forth a detailed
review procedure to determine the equity option classes for inclusion
in or removal from the proposed extended trading sessions. Further, the
Amended Proposal modifies Exchange rules regarding series eligibility,
the opening auction and opening of FLEX trading, order routing, and
disclosure in a manner that is appropriately designed to facilitate the
proposed extended trading of equity options.\63\
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\62\ See proposed Rules 5.1(c)(2) and 5.1(d)(2). Initially, the
Exchange would offer a subset of qualifying symbols for extended
session trading pursuant to this proposal. See <a href="https://www.cboe.com/notices/content/?id=59462">https://www.cboe.com/notices/content/?id=59462</a>.
\63\ See proposed Rules 5.1, 5.20, 5.31, 5.36, 5.71, and 9.20.
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The Commission received comments on the proposal.\64\ The
commenters expressed support for the proposal,\65\ and appreciation for
its measured approach.\66\ A commenter discussed the classification of
the proposed extended afternoon trading session,\67\ and the commenters
discussed implementation matters relating to the collection and
dissemination of consolidated market data and clearance and
settlement.\68\ The Exchange responded in the Amended Proposal as well
as a letter responding to the submitted comments.\69\
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\64\ See supra note 11. See also Letters from: Katie Kolchin,
Managing Director, Head of Equity & Options Market Structure, and
Gerald O'Hara, Vice President and Assistant General Counsel, The
Securities Industry and Financial Markets Association, dated March
19, 2026 (``SIFMA First Letter''), April 24, 2026 (``SIFMA Second
Letter''), and May 15, 2026 (``SIFMA Third Letter''); Angela Dunn,
Principal Associate General Counsel, NASDAQ, dated December 18, 2025
(``Nasdaq Letter'').
\65\ See Nasdaq Letter at 1.
\66\ See SIFMA First Letter at 1.
\67\ See id. at 3-5.
\68\ See id. at 5-7; SIFMA Second Letter at 2-3; Nasdaq Letter
at 1-2.
\69\ See Amendment No. 1, supra note 10; see also Letter from
Laura Dickman, Vice President, Associate General Counsel, Cboe
Exchange, Inc., dated April 15, 2026 (``Cboe Letter'').
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A. Extended Afternoon Session Classification
One commenter requests clarification regarding how the Exchange
would classify the proposed afternoon extended trading session of 4:00
p.m.-4:15 p.m. and describes the potential implications for market
participants of classifying this proposed session as GTH or RTH.\70\
The Amended Proposal designates the proposed extended afternoon session
as a Curb trading session. The Curb designation aligns with existing
Exchange terminology for the Curb trading session that already occurs
after RTH on the Exchange for index options, and it would provide
market participants with flexibility to specify the trading sessions
outside of RTH during which their equity option orders may trade. In
particular, the Curb designation would allow market participants to
determine in which sessions their orders would trade outside of RTH,
and for the exclusion of the proposed extended afternoon session if
that is desired.\71\ In addition, the Curb designation provides clarity
that market orders would not be permitted during the proposed extended
afternoon session (and they also would not be permitted during the
proposed extended morning session).\72\ Further, members with existing
Exchange ports for RTH would not need new ports for the proposed
extended trading sessions and would be able to utilize simple tags
through their ports to indicate the trading session(s) in which an
order may be executed.\73\ Accordingly, designating the proposed
extended afternoon session as a Curb session is consistent with Section
6(b)(5) of the Act.\74\
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\70\ See SIFMA First Letter, at 3-5. The Exchange previously
considered classifying the proposed extended afternoon trading
session as a new GTH session or, alternatively, as part of RTH. See
Notice, supra note 3; see also SIFMA First Letter at 3. In light of
that, this commenter sets forth pros and cons of each of those
classifications. For example, the commenter states that designating
the proposed extended afternoon session as GTH like the proposed
extended morning session would force firms to create new FIX tags so
that they could dictate whether their orders participate in either
session. As a point of comparison, the commenter states that a firm
currently may choose not to trade index options on the Exchange
during the current Curb session for those options. The commenter
also states that a GTH classification would ensure that firms'
front-end platforms and trade systems follow important GTH protocols
like preventing market orders, whereas market participants would
seek clarity regarding whether market orders would be available
under a RTH classification. See SIFMA First Letter at 3-4. As
discussed, infra, the Exchange, in Amendment No. 1, designates the
proposed extended afternoon session as a Curb session, which
addresses this commenter's concerns.
\71\ See Amendment No. 1, supra note 10, at 18012. Orders marked
for ``All Sessions'' would automatically carry over and be
actionable across all sessions, while those marked as RTH-Only would
not be actionable during the proposed GTH or Curb sessions; orders
marked as RTH and Curb would be actionable during the RTH and the
Curb sessions. See id. n.19.
\72\ See Amendment No. 1, supra note 10, at 18017 (stating that
Users will not be able to submit market orders in equity options
during the proposed GTH and Curb sessions, as is the case today
during GTH and Curb for index options).
\73\ See id. at 18012.
\74\ See proposed Rule 5.1; Cboe Letter at 1.
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B. Implementation Matters
While broadly supporting the proposal, commenters state that, if it
is approved, its implementation should be delayed in light of potential
consolidated market data and clearance and settlement issues.\75\ The
Commission's consideration of these matters, therefore, centers on
consideration of an appropriate implementation period following this
approval order. That is discussed in Section III.B.3 below, following
discussion of the comments and Exchange responses regarding
[[Page 33009]]
consolidated market data and clearance and settlement, in Sections
III.B.1 and III.B.2 below, respectively.
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\75\ See Nasdaq Letter; SIFMA First Letter; SIFMA Second Letter;
SIFMA Third Letter.
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1. Collection and Dissemination of Consolidated Market Data
Commenters ask whether the Options Price Reporting Authority
(``OPRA'') would have the ability and capacity to collect and
disseminate equity option quotation and transaction information for all
options exchanges during the extended trading sessions that the
Exchange has proposed.\76\ OPRA has confirmed that its RTH platform
would be able to support the proposed extended trading sessions for all
exchanges, following a 30-day notice period to OPRA subscribers.\77\
Moreover, the Exchange states that OPRA RTH lines would be used for
quote distribution and trade data for equity options trading during its
proposed extended trading sessions.\78\
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\76\ See Nasdaq Letter at 1-2; SIFMA First Letter at 6.
\77\ See Memorandum from the Division of Trading and Markets
Regarding a March 4, 2026, Conference Call with Representatives of
the Options Price Reporting Authority and the Securities Industry
Automation Corporation, dated March 4, 2026.
\78\ See Amendment No. 1, supra note 10, at 18018. The Exchange
states that, although equity options activity would utilize OPRA RTH
lines, GTH and Curb session trades would not be last trade eligible
and would not count toward the daily high/low prices. See id. n. 56.
The Exchange also states that Cboe proprietary index options will
continue to be quoted and trade on the OPRA GTH system during GTH
hours for index options. See id. n. 57.
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2. Clearance and Settlement
Commenters raise several considerations that relate to clearance
and settlement of equity option transactions during the proposed
extended sessions and the Options Clearing Corporation's (``OCC'')
role,\79\ including: (i) timing and accuracy of start-of-day positions
and Regulation SHO implications; \80\ (ii) potential impact on the
clearing fund; (iii) potential additional capital requirements; (iv)
potential margin impacts; (v) exercises and assignment notifications;
(vi) settlement calculations; (vii) potential amendments to the
Characteristics and Risks of Standardized Options, also known as the
Options Disclosure Document (``ODD''); (viii) potential additional
approvals for clearing members; and (ix) corporate actions and contract
adjustments.\81\ One commenter characterizes handling of corporate
actions as the biggest hurdle in a successful transition to extended
trading sessions for equity options.\82\ This commenter states that the
primary concerns in that regard revolve around corporate action events
that significantly alter underlying positions and the timing of related
announcements.\83\
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\79\ See SIFMA First Letter at 5-6; Nasdaq Letter at 2.
\80\ See SIFMA First Letter at 5; SIFMA Second Letter at 2-3.
With regard to Regulation SHO, this commenter states that start-of-
day positions must be accurate to correctly calculate and mark short
and long positions; if clearing firm files, including contrary
assignments, are delayed, start-of-day positions could be impacted,
leading to potential mismarking or other issues. See SIFMA First
Letter at 5.
\81\ See SIFMA First Letter at 5-7; Nasdaq Letter at 2.
\82\ See SIFMA First Letter at 7.
\83\ Id.
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In the Amended Proposal and Cboe Letter, the Exchange states that
the OCC has indicated it is operationally ready to support equity
option trading during the proposed extended trading sessions and would
utilize its existing processes and margin requirements.\84\ The
Exchange states that, based on discussions with the OCC and certain
clearing firms, the proposed extended trading sessions generally should
not hinder existing processes, including with respect to start-of-day
positions.\85\ The Exchange states that the OCC and clearing firms have
indicated that their end-of-day processes are designed to complete on
the same trading day, well before midnight.\86\ The Exchange states
that, as such, it does not expect the proposed GTH session to have any
impact on daily processing when processing occurs in the normal course,
and the proposed GTH session is not a concern from the Regulation SHO
perspective.\87\
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\84\ See Amendment No. 1, supra note 10, at 18019; Cboe Letter
at 2-3. The Exchange states that OCC already clears during extended
trading sessions for certain Cboe index options as well as certain
ETF options and other products that are eligible pursuant to
Exchange rules to trade until 4:15p.m. as part of RTH and,
therefore, has the functionality to support the proposed GTH and
Curb trading sessions for equity options. See Amendment No. 1, supra
note 10, at 18019; Cboe Letter at 2-3.
\85\ See Amendment No. 1, supra note 10, at 18013. See also Cboe
Letter at 2. The Exchange states that clearing firms have indicated
that the proposed extended trading session times generally should
not hinder processing because such processing is typically completed
on the trading day. See Amendment No. 1, supra note 10, at 18013.
\86\ See Amendment No. 1, supra note 10, at 18013, 18019.
\87\ See id. See also Cboe Letter at 2. The Exchange also states
that it and the OCC intend to apply to the proposed extended equity
option trading sessions the existing authorization procedures that
apply to GTH trading of index options on the Exchange. See Amendment
No. 1, supra note 10, at 18019. An Exchange member that is already
authorized for GTH trading of index options would not require any
further Exchange or OCC authorizations to trade equity options
during the proposed GTH session. Exchange members that are not
currently authorized for GTH trading of index options but wish to
trade equity options during the proposed GTH session would be
required to receive authorization from both the OCC and the Exchange
before doing so. No special authorization is required for
participation in the proposed Curb session. See Amendment No. 1,
supra note 10, at 18019.
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The Exchange acknowledges that a corporate action that
significantly impacts the value of a security may be announced while
the equity option overlying the security is trading during the proposed
Curb session.\88\ The Exchange states that if such an announcement
results in a halt of the underlying security, trading in the equity
option should also halt.\89\ The Exchange also states that
announcements of the effectiveness of a corporate action made after
4:00 p.m. are similar to the announcement of a corporate action that is
made prior to 4:00 p.m.\90\ The Exchange states that, as such,
corporate action announcements made during the proposed extended
afternoon session would generally have the same impact as corporate
actions that are announced as effective during the RTH session.\91\
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\88\ See Amendment No. 1, supra note 10, at 18014.
\89\ See id.
\90\ See id.
\91\ See id. The Exchange also states that it continues to
participate in industry discussions to address concerns about late
corporate action notifications and the impacts they can have on
option contract adjustments and option positions during all trading
sessions (not just extended trading hours). See Cboe Letter at 2.
Further, the Exchange states that it is preparing a separate rule
filing that would provide the Exchange with authority to address
certain scenarios as part of obvious error rules. See id.
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3. Implementation Timing
As noted above, the Commission's consideration of the consolidated
market data and clearance and settlement matters raised by commenters
centers on consideration of an appropriate implementation period
following this approval order. One commenter requests that any
Commission approval of the proposed rule change be contingent upon
OPRA's readiness to permit all OPRA participant exchanges to trade
during the proposed extended sessions and OCC's readiness to clear
equity options during the proposed extended sessions.\92\ The other
commenter requests that the proposed rule change have an effective date
no less than 120 days from the date it is approved, which the commenter
states would be a reasonable time period for market participants to
address outstanding issues.\93\
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\92\ See Nasdaq Letter at 1-2.
\93\ See SIFMA First Letter at 7; SIFMA Second Letter at 3. See
also SIFMA Third Letter (clarifying that its request for a 120-day
implementation delay applies to the Exchange's proposal but not
other options exchange proposals to extend trading hours, and urging
harmonization across options exchange proposals for extended
trading). SIFMA's First Letter requests an effective date of no less
than 120 business days (emphasis added), and SIFMA's Second Letter
requests an effective date of no less than 120 days (without
specifying ``business'' days), in either case to run from the date
of approval of the Amended Proposal. See SIFMA First Letter at 7;
SIFMA Second Letter at 3. SIFMA's Third Letter characterizes its
prior two letters as having requested a 120-day implementation delay
(without specifying ``business'' days). See SIFMA Third Letter at 2.
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[[Page 33010]]
The Exchange states that some firms are ready to trade equity
options in the proposed extended trading sessions, but it also
acknowledges that some firms may require additional time to make
necessary system modifications.\94\ The Exchange states that it would
not launch the proposed equity option extended trading sessions until
at least 30 days following any Commission approval of this proposed
rule change, and approximately three months after the Exchange's
publication of technical specifications related to the proposed
extended trading sessions.\95\ The Exchange also states that the OCC
must file a proposed rule change to support the proposed extension of
trading hours for equity options, and that the Exchange would not
launch its proposed extended trading sessions for equity options until
after any Commission approval of the OCC's rule filing.\96\
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\94\ See Cboe Letter at 2. The Exchange states that certain
firms have requested that the Exchange launch trading in the
proposed GTH and Curb sessions as soon as possible. See id.
\95\ See id. See also Amendment No. 1, supra note 10, at 18019.
The Exchange published these technical specifications on April 15,
2026; they are available at: <a href="https://www.cboe.com/notices/content/?id=59462">https://www.cboe.com/notices/content/?id=59462</a>.
\96\ See Amendment No. 1, supra note 10, at 18017, n. 52.
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The Exchange's timing for the commencement of the proposed extended
trading sessions must be consistent with Section 6(b)(1) of the
Act,\97\ which requires, among other things, that the Exchange is so
organized and has the capacity to comply with the provisions of the
Act, Commission rules and regulations thereunder, and its own rules;
Section 6(b)(5) of the Act, which requires, among other things, that
the Exchange's rules be designed to foster cooperation with persons
engaged in regulating, clearing, settling, processing information with
respect to and facilitating transactions in securities, and 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; and Section 6(b)(8) of the Act, which requires that
the rules of a national securities exchange not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. These requirements have been met here because the
Exchange's proposed extended trading sessions would not commence until
at a minimum: (i) OPRA is prepared to collect and disseminate quote and
trade information for any exchange that adopts the same proposed
extended trading sessions, (ii) the OCC is prepared to clear and settle
trades for any such exchange, and (iii) exchange members are afforded a
reasonable amount of time to prepare for extended equity option
trading.
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\97\ 15 U.S.C. 78f(b)(1).
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As discussed above, OPRA has confirmed its readiness to collect and
disseminate quote and trade information for any exchange, and the
Exchange would utilize an OPRA platform that would be available to any
exchange seeking to offer the same extended trading sessions as the
Exchange. Since OPRA would provide a 30-day notice period to its
subscribers, the Commission understands that the Exchange would not
commence the proposed extended session trading until after that 30-day
notice period has concluded.
With respect to OCC readiness and exchange member readiness, the
Exchange effectively has committed not to implement the proposed
extended session trading until the later of: (i) 30 days following the
date of this approval order,\98\ (ii) approximately three months after
the Exchange's publication of technical specifications,\99\ and (iii)
any Commission approval of the proposed rule change that the OCC must
file with the Commission pursuant to Section 19(b) of the Act.\100\
Multi-listed equity options are standardized options and, as such,
transactions in them that occur during the proposed extended trading
session must be cleared and settled by the OCC.\101\ Because the
Exchange would not implement the proposed extended trading sessions
until after effectiveness of the OCC's proposed rule change, the
Exchange has acknowledged that it would not implement the proposed
extended sessions until the OCC is prepared to clear and settle equity
option trades that occur during those sessions.
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\98\ See supra note 95 and accompanying text.
\99\ See id.
\100\ 15 U.S.C. 78s(b). In light of the date of this approval
order, the time period countenanced by (i) is moot because the time
periods countenanced by (ii) and (iii) will run past the date that
is 30 days following the date of this approval order. See supra note
95 and accompanying text. In addition, as noted above, the
Exchange's implementation of the Amended Proposal also is contingent
on the conclusion of OPRA's 30-day notice period to its subscribers.
\101\ See 17 CFR 240.9b-1.
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Taken together, the Exchange's proposed implementation timing is
designed to provide Exchange members with reasonable time and
opportunity to prepare for the proposed extended trading sessions, and
therefore consistent with the Act.\102\ The Exchange's publication of
technical specifications in mid-April enabled Exchange members to begin
technical preparations for the proposed extended sessions prior to this
approval order. The approximately three-month implementation period
following such publication would conclude before the 120-day post-
approval implementation period requested by one commenter. But to the
extent Exchange members already have begun preparations, they may
require less time to become fully prepared than 120 days following this
approval order. In addition, the proposed rule change that the OCC must
file with the Commission is subject to a statutory timeframe during
which Exchange members can continue their preparations, including
obtaining any necessary trading authorizations from the Exchange or the
OCC.\103\
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\102\ The Exchange has provided FAQs on its website to assist
market participants with their preparations for the proposed
extended trading sessions for multi-listed equity options. See
<a href="https://www.cboe.com/document/tech-spec/content/technical-specifications/equity-options-extended-trading-hours-faq/overview">https://www.cboe.com/document/tech-spec/content/technical-specifications/equity-options-extended-trading-hours-faq/overview</a>.
\103\ See supra note 87. See also Section 19(b) of the Act; 15
U.S.C. 78s(b).
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For the foregoing reasons, the Commission finds that the Amended
Proposal is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange.
IV. Conclusion
It is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change, as modified by Amendment No. 1, (SR-
CBOE-2025-079) be, and it hereby is, approved.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\104\
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\104\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-10951 Filed 6-1-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on June 2, 2026.
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