Notice2026-18664
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 6.5
Primary source
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Published
September 14, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 176 (Monday, September 14, 2026)</title>
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[Federal Register Volume 91, Number 176 (Monday, September 14, 2026)]
[Notices]
[Pages 58216-58218]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-18664]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106312; File No. SR-C2-2026-025]
Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 6.5
September 9, 2026.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 1, 2026, Cboe C2 Exchange, Inc. (the ``Exchange'' or
``C2'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe C2 Exchange, Inc. (the ``Exchange'' or ``C2'') proposes to
amend Exchange Rule 6.5 to eliminate the fee currently applicable in
connection with a catastrophic error review and instead assess a
reduced $500 fee when the Obvious Error Panel or Catastrophic Error
Panel votes to uphold the decision under review. The text of the
proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/options/regulation/rule_filings/ctwo/">https://www.cboe.com/us/options/regulation/rule_filings/ctwo/</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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Exchange Rule 6.5, effective
September 1, 2026, to eliminate the $5,000 charge currently applicable
in connection with a catastrophic error review and adopt a reduced $500
fee when the Obvious Error Panel or Catastrophic Error Panel votes to
uphold the decision under review.\3\
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\3\ See Exchange Rule 6.5, Nullification and Adjustment of
Option Transactions Including Obvious Errors.
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Currently, Exchange Rule 6.5(d)(3) provides that, in connection
with a catastrophic error review, if an Official determines that a
Catastrophic Error has [sic] occurred, the Trading Permit Holder will
be subject to a charge of $5,000. The Exchange proposes to amend Rule
6.5(d)(3) to eliminate that $5,000 charge. In its place, the Exchange
proposes to adopt new Rule 6.5(k)(5) and Rule 6.5(l)(5), which provide
that if the Obvious Error Panel or Catastrophic Error Panel,
respectively, votes to uphold the decision made under Rule 6.5, the
Exchange will assess a $500 fee against the Trading Permit Holder(s)
who initiated the request for appeal. In addition, in instances where
the Exchange, on behalf of a Trading Permit Holder, requests a
determination by another market center that a transaction is clearly
erroneous, the Exchange will pass any resulting charges through to the
relevant Trading Permit Holder. The proposed change is designed to
eliminate the fee borne by Trading Permit Holders in connection with
the Exchange's initial catastrophic error review and instead apply a
fee at the appeal stage of the process. The proposed $500 fee is a
nominal administrative charge associated with the appeal process that
is substantially
[[Page 58217]]
lower than the $5,000 charge currently applicable in connection with a
catastrophic error review, and is designed to discourage the initiation
of unfounded appeals. The proposed $500 fee is identical to the fee
assessed under Cboe BZX Exchange, Inc. (``BZX'') Rule 20.6 and Cboe
EDGX Exchange, Inc. (``EDGX'') Rule 20.6 when the Obvious Error Panel
on those exchanges votes to uphold a decision; the Exchange notes that
BZX and EDGX utilize a single Obvious Error Panel for appeals, whereas
the Exchange maintains separate Obvious Error and Catastrophic Error
Panels.
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.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \5\ 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) 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,\6\ which requires that Exchange rules provide for the equitable
allocation of reasonable dues, fees, and other charges among its
Trading Permit Holders and other persons using its facilities.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
\6\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed amendments to Exchange Rule 6.5
to eliminate the $5,000 charge currently applicable in connection with
a catastrophic error review and to adopt a reduced $500 fee assessed
against a Trading Permit Holder who initiates a request for appeal that
is upheld by the Obvious Error Panel or Catastrophic Error Panel are
reasonable. The proposed $500 fee is a nominal administrative charge
associated with the appeal process that is substantially lower than the
$5,000 charge currently applicable in connection with a catastrophic
error review, and is designed to discourage the initiation of unfounded
appeals. The Exchange notes that the proposed $500 fee is identical to
the fee assessed under BZX Rule 20.6 and EDGX Rule 20.6 when the
Obvious Error Panel on those exchanges votes to uphold a decision. The
Exchange believes the proposed changes are equitable and not unfairly
discriminatory because the proposed $500 fee will apply uniformly to
any Trading Permit Holder(s) who initiate a request for appeal that is
upheld by the applicable Panel, and the elimination of the $5,000
charge applies uniformly to all Trading Permit Holders.
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.
Intramarket Competition. The Exchange does not believe the proposed
changes will impose any burden on intramarket competition. The proposed
amendments to Rule 6.5 to eliminate the $5,000 charge currently
applicable in connection with a catastrophic error review and to adopt
a reduced $500 fee assessed when the Obvious Error Panel or
Catastrophic Error Panel votes to uphold the decision under review will
apply uniformly to all Trading Permit Holders that initiate a request
for appeal under Rule 6.5.
Intermarket Competition. The Exchange does not believe the proposed
changes will impose any burden on intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
proposed amendments to Exchange Rule 6.5 concern the Exchange's own
error-review process and do not impose any burden on intermarket
competition. Trading Permit Holders may readily direct their order flow
to competing venues if they deem the Exchange's fees to be excessive.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and paragraph (f) of Rule 19b-4 \8\
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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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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#9be9eef7feb6f8f4f6f6fef5efe8dbe8fef8b5fcf4ed"><span class="__cf_email__" data-cfemail="3341465f561e505c5e5e565d4740734056501d545c45">[email protected]</span></a>. Please include
file number SR-C2-2026-025 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-C2-2026-025. 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-C2-2026-025 and should be submitted on
or before October 5, 2026.
[[Page 58218]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-18664 Filed 9-11-26; 8:45 am]
BILLING CODE 8011-01-P
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